Another significant monthly decline was posted in June
Canadian home prices posted their largest monthly decrease since at least 2005 in June, according to new figures released by the Canadian Real Estate Association (CREA).
The national benchmark price of a home slipped by 1.9% over the previous month, CREA said, the most significant month-over-month drop in data going back 17 years and marking a third consecutive month of price depreciation.
Home sales also edged down again, falling by 5.6% in June compared with May as monthly activity on a non-seasonally-adjusted basis plummeted 23.9% over the same month last year.
That news arrives amidst a series of sizeable interest rate hikes from the Bank of Canada, with its Wednesday announcement of a one-percentage-point increase signalling the largest jump in its benchmark rate since 1998.
Sales had dropped in 75% of local markets across the country in June, CREA said, as Canada’s largest cities including Toronto and Vancouver posted significant month-over-month decreases.
Jill Oudil, CREA’s chair, said that rising interest rates and growing economic uncertainty had contributed strongly to the continued cooling of the Canadian housing market.
“The cost of borrowing has overtaken supply as the dominant factor affecting housing markets at the moment, but the supply issue has not gone away,” she said.
“While some people may choose to wait on the sidelines as the dust settles in the wake of recent rate hikes, others will still engage in the market in these challenge times.”
There were more newly listed homes on the national market in June, with a 4.1% monthly increase across the country driven mainly by higher supply in Montreal as inventory in the Greater Toronto Area (GTA) and Greater Vancouver Area (GVA) tightened.
