The market posted the largest single-quarter decline in 5 years, according to the US Federal Reserve
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In its latest data release, the Federal Reserve Bank of Dallas noted that Canadian real estate prices have shown its sharpest rate of decline in Q3 2017, a marked contrast to the situation just a few months ago when the Canadian housing market boasted of the fastest rising prices.
The Dallas Fed data stated that Canadian real estate prices fell by 3.82% in the third quarter of last year, the largest single-quarter decline since the early 1990s and the first since 2012. This also marked the largest single-quarter decline in the world at the time.
These developments might represent “the beginning of a broad market correction, like that seen in 1990,” as explained by Better Dwelling.
Read more: Although cautious, BoC’s rate hikes will still incite ripples – DLC’s Cooper
However, the data emphasized that “despite the large quarterly decline, Canadian real estate prices are still much higher. The index is 7.44% higher than the same quarter last year, almost twice as much as the aggregate index for other countries,” Better Dwelling added.
“The increase is quickly tapering from peak growth observed in the first quarter of 2017. The quarterly decline is significant, but even so, the market is out performing many other markets.”
Perhaps the most important aspect to consider is that the decline occurred starting approximately 6 months before the OSFI’s revised mortgage rules were introduced in a bid to cool conventional mortgage borrowing.
“The rule changes add significant uncertainty to the market, especially after prices are starting to look a little softer.”
Related stories:
Seemingly no brakes on the Toronto condo price train
Rising interest rates bad news for Vancouver homebuyers
The Dallas Fed data stated that Canadian real estate prices fell by 3.82% in the third quarter of last year, the largest single-quarter decline since the early 1990s and the first since 2012. This also marked the largest single-quarter decline in the world at the time.
These developments might represent “the beginning of a broad market correction, like that seen in 1990,” as explained by Better Dwelling.
Read more: Although cautious, BoC’s rate hikes will still incite ripples – DLC’s Cooper
However, the data emphasized that “despite the large quarterly decline, Canadian real estate prices are still much higher. The index is 7.44% higher than the same quarter last year, almost twice as much as the aggregate index for other countries,” Better Dwelling added.
“The increase is quickly tapering from peak growth observed in the first quarter of 2017. The quarterly decline is significant, but even so, the market is out performing many other markets.”
Perhaps the most important aspect to consider is that the decline occurred starting approximately 6 months before the OSFI’s revised mortgage rules were introduced in a bid to cool conventional mortgage borrowing.
“The rule changes add significant uncertainty to the market, especially after prices are starting to look a little softer.”
Related stories:
Seemingly no brakes on the Toronto condo price train
Rising interest rates bad news for Vancouver homebuyers
