Canadian real estate isn’t getting much of a boost despite lower rates and billions in stimulus. Canadian Real Estate Association (CREA) data shows the price of a typical home (composite benchmark) slipped lower in December. Despite plunging rates, most provinces saw prices grind lower and all but one remained lower than the record high. Meanwhile, provinces like Ontario are seeing home prices fall further into correction territory.
Canadian Real Estate Prices Slipped Lower In Most Provinces
Canadian real estate prices generally slipped last month. The benchmark composite fell 0.2% ($1,500) to $705,600 in December. Prices are now down 17.2% (-$146,400) from the record high that was reached back in March 2022. Only a few markets were able to resist slipping lower last month.
Just 3 out of the 9 provincial HPIs showed growth last month. The largest move was in Nova Scotia, where prices climbed 0.7% (+$2,900) in December. It was followed by New Brunswick, which also advanced 0.7% (+$2,400). Then there’s Newfoundland rounding out the three, though it barely budged with a 0.1% (+$400) increase to $305,700. It’s worth noting that all 3 three of these markets have a significant concentration of employment in government services, and the back-to-office legislation was designed to boost demand.
The remaining provinces saw prices contract last month. PEI saw the sharpest monthly drop, with a typical home plunging 1.0% (-$3,900) to $370,300 in December. It was followed by Alberta ($505,200; -0.3% m/m), and Ontario ($859,600; -0.2% m/m).
Ontario Real Estate Prices Are Correcting Much Faster Than Other Provinces
The composite benchmark prices of a typical home across Canada and by province. Manitoba is excluded due to a lack of benchmark price.
Source: CREA; Better Dwelling.
Only a single province was at its record high last month—New Brunswick. The remaining showed relatively small declines, and only two were 6-figures from peak.
The largest plunge from peak was also in the most expensive provinces—Ontario and BC. The benchmark in Ontario fell to $859,600 in December, and remains 20.6% (-$220,800) below the record high. BC is a distant second place for biggest drop with the benchmark at $955,500, down 10.9% (-$116,100) from its record high.
Canadian real estate prices are losing steam before they even begin to take off. Prices have been largely resistant to declines, believing that normalization of rates would lead to normalized sales. That hasn’t happened yet, and with bond yields on the rise—the odds aren’t in favor of a quick return to normal.