Canadian house prices fell 23% in July from February peak: CREA

The Canadian Real Estate Association Find Sell ​​house fell for the fifth consecutive month between June and July.

On a seasonally adjusted basis, the association said sales in July fell 5.3% from June. Actual sales last month were 37,975 units, down 29% from last July.

“That puts activity back in the pre-COVID range, or about 40 percent below the peak of the demand-side outbreak seen in March,” said Robert Kavcic, senior economist at BMO Capital Markets. last year,” Robert Kavcic, senior economist at BMO Capital Markets, in a note to analysts.

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“Unadjusted, it was the quietest July in terms of sales since the 2020 financial crisis.”

The drop in sales month-on-month in July was the smallest drop in the past five months. Market watchers say it’s too early to say whether that trend will continue.

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However, economists and CREA president Jill Oudil said it was a continuation of the market cooling off from the breakneck pace seen last year and earlier this year, when bidding wars were normal. often.

Much of the recovery was attributed to the Bank of Canada raising its benchmark interest rate by one percentage point to 2.5% in July in the biggest increase the country has ever seen in 24 years.

Changes in mortgage rates tend to reflect such spikes, impacting purchasing power.

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As rates rose and sales plummeted, many buyers sat on the sidelines, anticipating better deals to come in the fall and disappointing sellers, who had to accept the fact that they had probably won’t make as much as the neighbors sell in the winter.

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Davelle Morrison, a Toronto-based broker with Bosley Real Estate Ltd., said: “Certainly a lot of people are waiting until September before they list property and they are trying not to list in August. if they don’t have to.

As a result, new listings for July came in at 73,436, down 6% from last July and on a seasonally adjusted basis, down 5% from June.

When homes hit the market earlier this year, people can buy before they sell their property and there’s less risk of their property not selling.

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Now, Morrison is telling people to sell their positions first because of how long the property is in use.

She also tells her clients to “fasten your seat belts” if prices fall further and interest rates continue to rise.

Medium home resale price was $629,971, down 5% from $662,924 last July and on a seasonally adjusted basis of $650,760, down 3% from June and down 23% from February peak, CREA said. know.

Excluding the often hot Greater Vancouver and Toronto Areas from the calculation would cut $104,000 off the national average price.

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Kavcic feels the drop constitutes an ongoing market correction “virtually everywhere, but to varying degrees.”

“Southwest Ontario is feeling the hardest, with markets like Kitchener-Waterloo and London down about 15 percent from their peak levels,” he said.

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GTA home sales down 47% compared to July last year

GTA home sales down 47% from last July – August 5, 2022

He noticed prices in Vancouver have now fallen for four straight months, and Montreal has been more immune to but not out of the recession with drops over the past two months.

“We see Alberta as the market most likely to weather this storm because it stalled for a number of years before the pandemic, has never seen frost like Ontario, and is now supported by close to $100 in oil and population flows from other regions,” wrote Kavcic.

“However, in a rally to the strength of higher interest rates, even Edmonton and Calgary suffered either a drop (Calgary) or a drop (Edmonton) in prices although sales activity remained steady. “

© 2022 Canadian Press

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