Canada’s red-hot real estate market showed signs of cooling down in March as both the number of homes sold and the average selling price declined from the previous month’s level.
The Canadian Real Estate Association (CREA), which represents more than 100,000 realtors across the country, reported Tuesday that on average, homes sold on the Multiple Listings Service went for $796,000.
That’s down about three per cent from the all-time high of $816,720 the previous month, and a noteworthy change in direction after the unprecedented tear that Canadian home prices have been on for the better part of two years now.
“While the market remains historically very active, March definitely saw a slowdown compared to February in terms of both activity and price growth,” CREA chair Jill Oudil said. “One month does not make a trend, so we’ll have to wait and see if this is the beginning of the long-awaited cooling off of this market.”
Average selling prices were down, as was the actual volume of homes sold. Total sales came in 5.6 per cent lower in March than they did in February. They were also down by 16 per cent from the all-time high clocked in the same month a year earlier.
Though down from February’s level, the average selling price is still up by more than 11 per cent compared to where it was a year ago. But that pace of increase is slowing, too. March’s annual increase is about half the 20 per cent annual gain clocked in February.
A ‘marked slowdown’
CREA says the national average price number can be misleading because it is so easily skewed by sales in big expensive markets like Toronto and Vancouver. So the realtor trumpets a different number, known as the House Price Index (HPI), as a better gauge of the market because it adjusts for the volume and type of housing.
The HPI increased by one per cent in March, a “marked slowdown” from the 3.5 per cent increase in February, CREA noted.
Nasma Ali says she’s seen signs of a slowdown in Toronto, where she’s a broker and founder of One Group Real Estate. While the numbers released Tuesday are for March, she says the trend has become even more pronounced in April, where “buyer fatigue” may be setting in after the Bank of Canada hiked its interest rate twice in the last two months, and is expected to raise it even more in the coming months.
“I just think that this is kind of the beginning of a slower market, maybe a more balanced market,” she told CBC News in an interview. “We’re kind of at the top … we’ve just started to go down a little bit [but] I just don’t know how long or how low that that downward will be.”
