A large majority of census metropolitan areas saw prices stay unchanged or tick slightly down
Canadian new home prices were essentially unchanged in December, with prices static or slightly down in 21 of 27 census metropolitan areas, according to the national statistics agency.
Across the country, new home prices ticked down by 0.9% annually in December, with the most significant monthly declines seen in Halifax (down by 1.2%) and Regina (down by 0.9%). Builders in these markets cited weaker conditions as the reason for the drops.
“In a year that saw the Bank of Canada increase its policy interest rate three times to rest at a high of 5%, housing demand waned in 2023,” Statistics Canada said. “The elevated borrowing costs faced by consumers, worked to cool the market.”
The largest month-over-month increases in new home prices were registered in Calgary (up by 0.4%), Saskatoon, and Sherbrooke (each up by 0.2%).
Data from Canada Mortgage and Housing Corporation (CMHC) indicated that the national supply of unabsorbed (completed but not sold) single family homes (single detached, semi-detached, and row) was 37.6% above the level seen in December 2022.
Chase Belair of nesto warns a significant rate cut might boost market activity but could also push up home prices, considering the real estate market's current fragility.https://t.co/BYRLizqPEz#mortgageindustry #industrytrends #ratecuts #interestrates
— Canadian Mortgage Professional Magazine (@CMPmagazine) January 19, 2024
On a year-over-year basis, the largest price declines in December were seen in Ottawa (down by 4.8%) and Victoria (down by 4.2%).
At the same time, new home prices increased the most in the relatively more affordable markets of Quebec (up by 3.3% annually) and Calgary (up by 2.7%). These regions saw single-family benchmark prices settle at $392,500 and $635,600, respectively, versus the $779,100 level nationwide.
