The national aggregate home price in the fourth quarter slipped almost 3% year-over-year
The worst-case scenario for Canadian home prices involved figures that would keep many homeowners awake at night.
But fears that price declines from the peak could be well into double figures appear to be overly pessimistic according to a new report from Royal LePage (RLP) published today (Jan. 13).
The real estate brokerage says that the national aggregate home price was down 2.8% in Q4 2022 year-over-year.
While that was the first year-over-year decline recorded in more than a decade, the figure remains above pre-pandemic levels following a 17% gain in prices since the last quarter of 2019 – and 14% since the end of 2020.
RLP’s president and CEO, Phil Soper, says the Canadian housing market ended 2022 much as expected.
"Activity levels were down sharply compared to the hyper-charged state we experienced during the pandemic, with home prices flattening or showing modest declines. While the red-hot market conditions are behind us, there remains a widespread shortage of homes in Canada that cannot be offset by temporarily cooling demand,” he said.
Soper added that once interest rates stabilize, he expects to see a return to the market for the many would-be homebuyers who have been sidelined while waiting for the market to reach its low point.
This growth in activity, which Soper believes will come sooner than many expect, will be supported by high levels of employment, strong household savings, and growing household formation.
How much is an average home?
The data shows that the national median price of a single-family detached home declined 3.7% year-over-year to $781,900, while the median price of a condominium increased 1.4% year-over-year to $561,600.
"It may be headline-grabbing to say that prices are down by double digits, yet well less than one per cent of property owners completed their purchases in February or March of last year, when the pandemic-driven urgency to buy and serious housing supply shortages came together to create a final spike in prices," said Soper. "Over time, Canadian homeowners have benefited greatly from real estate appreciation."
