An analysis of 21 major housing markets in Canada has found that only three areas have not seen a price decline since the Canadian real estate market reached its peak in June 2023.
At that time, the national benchmark price was $760,600, before a downward trend set in across most major markets in Canada over the next five months.
Real estate firm Zoocasa released an analysis this week comparing benchmark price data from the Canadian Real Estate Association (CREA) and found that only three markets — Calgary, St. John’s and Saint John — had not seen a price decline.
The largest drop was recorded in Kitchener-Waterloo, where prices decreased by 8.9 per cent since June to $708,600.
Other Ontario cities, including London, St. Thomas and Hamilton-Burlington have seen benchmark prices fall by more than 7 per cent since June, while major markets like Toronto, Vancouver, Ottawa and Winnipeg have also experienced price drops since the summer.
In the GTA, prices dropped 7.7 per cent since June and 0.1 per cent from a year earlier, while Guelph recorded a 6.6 per cent drop since June.
While the market generally cools down in the winter, increased borrowing costs are also likely a contributing factor. The price adjustments have brought the market closer to pre-pandemic levels.
In the three markets that recorded growth since June, Calgary saw the largest increase at 1.7 per cent, followed by St. John’s (1.5 per cent) and Saint John (0.1 per cent).
The decline across the majority of the markets has been most significant for single-family homes. While prices for condos have dropped in some markets, including Kitchener-Waterloo and the GTA, they’ve largely remained stable and even increased in others.
The strongest growth was recorded in Saint John and St. John’s, where condo prices jumped 12.9 per cent and 7.4 per cent since June. Calgary and Halifax-Dartmouth also recorded year-over-year price growth at 16 per cent and 13.8 per cent.
Overall, the analysis is in line with other reports that have noted an uneven but general market downtown in 2023 based on sales volume.
Montreal, for instance, recorded a cumulative housing sales drop of more than 14 per cent compared to the year prior, its steepest decline since 2000.
Toronto and Calgary also witnessed significant downturns in sales volume throughout the year, though sales rebounded slightly in December. Toronto recorded a sales increase of more than 11 per cent compared to the same month the previous year, while Calgary saw a 13.8 per cent rise in December sales, despite an 8 per cent overall drop from 2022.
The record-breaking warmth of December may have contributed to the sales increase, as well as a decrease in mortgage rates towards the end of the year, with the lowest available five-year fixed rate dropping to 5.4 per cent.
While some economists believe housing prices could stabilize by March, the marginal job growth recorded in December, coupled with the potential impact of wage increases on future interest rate cuts, leads others to predict further challenges ahead. These challenges include a growing risk of insolvency, which has now exceeded pre-pandemic levels.
That trend is largely attributed to growing household debt, inflation and high interest rates. The effects are particularly acute in Ontario, B.C., Alberta, Saskatchewan and Manitoba.