The Canadian housing market hasn’t seen a home sales situation like this since the summer of 2020.
National home sales dropped by 12.6% between March and April and actual (not seasonally adjusted) sales activity was down 25.7% from the record highs we saw in April 2021, according to the Canadian Real Estate Association (CREA).
Sales were down in 80% of Canadian markets in April 2022, save for Montreal, Halifax-Dartmouth and Victoria, B.C.
Why are home sales down?
“Housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, Chair of CREA. “For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies.”
Shaun Cathcart, CREA’s Senior Economist, expanded on these points adding it’s not just higher interest rates that are contributing to the slowdown in real estate transactions.
“It’s not about a few hundred bucks more on your mortgage payment each month, it’s about whether or not you qualify for the loan,” Cathcart said during CREA’s housing market report, which you can watch below.
He explains within the span of a month, typical discounted five-year fixed rates have gone from the low 3% range to the low 4% range, which has raised the stress test levels for Canadian home buyers, reducing their purchasing power.
However, for the first time since April 2020, the aggregate composite MLS® Home Price Index (HPI)—the most accurate way a REALTOR® can gauge a neighbourhood’s home price levels and trends—edged down 0.6% on a month-over-month basis in April 2022, a stark contrast from two months earlier when the MLS® HPI logged a near 30% increase.
Canada’s real estate activity continues to evolve at a fast pace. As always, we’ll keep you posted on the pulse of the Canadian housing market. Remember, contact a REALTOR® for more detailed information about your neighbourhood and its price trends.
Courtesy: realtor.caPosted by Infinity Admin on
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