TORONTO — A report by Re/Max Canada forecasts the national average home sale price in Canada will fall 2.2% in the final months of the year.
The network of real estate brokers and agents said Wednesday the moderation in the market for the September-to-December period comes amid rising interest rates, record inflation, and broader global and economic uncertainties.
Mortgage rates have risen sharply this year, raising the cost of borrowing for potential buyers.
Re/Max Canada president Christopher Alexander said many markets are experiencing softer sales given the recent interest rate hikes.
“This provides some reprieve from the unprecedented demand and unsustainable price increases we’ve seen across Canada through 2021 and in early 2022,” Alexander said in a statement.
“However, the current lull in the market is only temporary. Until housing supply increases, these ‘boom’ and ‘bust’ cycles will likely be a recurring event.”
Prices in Kelowna and Central Okanagan are looking at a 6.5% decrease, Metro Vancouver’s are expected to decline 3%, and the Greater Toronto Area is forecast to fall 6.3%. Winnipeg’s prices are expected to drop 8%.
However, the drop in prices in the final months of 2022 isn’t expected to be universal. The report said seven out of the 30 markets analyzed are likely to experience modest price appreciation between 1.5% and 7%.
Calgary is expected to rise 3%, while Edmonton is forecast to gain 1.5%. St. John’s, N.L., is predicted to gain 7%.
The report follows a move by the Canadian Real Estate Association earlier this month to cut its forecast for home sales this year and lower its expectations for price growth.
CREA is expecting 532,545 properties to trade hands via Canadian MLS systems this year, down 20% from the 2021 annual record, while sales are expected to drop another 2.3% in 2023.
The association also forecasts the national average home price is forecast to rise by 4.7% on an annual basis to $720,255 by the end of the year and edge up another 0.2% to $721,814 in 2023.
The outlook is down from CREA’s forecast in June that predicted a 14.7% decline in sales this year and a 10.8% increase in the national average home price.
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