Home price declines extend in May, with Calgary a notable exception
Home sales and prices were down month-over-month in a growing number of metro areas across the county, according to the latest data from regional real estate boards.
In the Greater Toronto Area, average benchmark prices were down for the third consecutive month, falling over $122,000 from their February peak. But they still remain 9.4% above price levels from a year ago.
“After a strong start to the year, the current rate tightening cycle has changed market dynamics, with many potential home buyers putting their purchase on hold,” notes TRREB’s chief market analyst Jason Mercer. “This has led to more balance in the market, providing buyers with more negotiating power.”
It was a similar story in Vancouver and Montreal, which saw their benchmark price average fall month-over-month for the first time this year.
Calgary, however, continued to see benchmark prices rise, even though the pace of growth has eased. Month-over-month, prices in Calgary were up 3.7%, bucking the trend of declining prices in most other markets.
Last month, housing analyst Ben Rabidoux of Edge Realty Analytics said, “I think we’re still in the early innings of Alberta outperforming the rest of the country.”
It’s worth noting that, as of this month, the methodology used to calculate the national MLS Home Price Index (HPI) has changed. The HPI, first launched in 2012, is used by a majority of real estate boards and associations to calculate price levels and trends.
The Canadian Real Estate Association explained that the HPI will now “use data collected from the previous five-year rolling period.” The way in which benchmark prices are calculated has also changed, and will now be calculated, “based on current benchmark attributes instead of linking benchmark prices to historical benchmark attributes.”
Regional home price roundup
Here’s a look at the May statistics from some of the country’s largest regional real estate boards:
Greater Toronto Area
-48.6% month-over-month (MoM)
MLS Home Price Index:$1,212,806
Active listings: 15,433
“Bank of Canada rate hikes, including the 50-basis point hike on June 1, are impacting homebuyers in the short term. There is now a psychological aspect where potential buyers are waiting for a bottom in price,” said TRREB President Kevin Crigger. “This will likely continue through the summer. However, as homebuyers adjust to higher borrowing costs, housing demand will be supported by extremely low unemployment, high job vacancies, rising incomes and record immigration.”
Source: Toronto Regional Real Estate Board (TRREB)
Greater Vancouver Area
MLS Home Price Index for all property types:$1,261,100
New listings: 6,377
Active listings: 10,010
“With interest rates rising, home buyers are taking more time to make their decisions in today’s housing market,” said REBGV chair Daniel John. “Upward pressure on home prices has begun to ease in the housing market over the last two months. Where home prices go next will depend on housing supply.”
Source: Real Estate Board of Greater Vancouver (REBGV)
Montreal Census Metropolitan Area
Home Sales: 4,874
Median Price (single-family detached):$576,000
Average Price (condo):$365,000
New listings: 7,152
Active listings: 11,304
“With the Bank of Canada’s new 50 basis point increase on June 1st, it will become increasingly difficult to qualify for a mortgage in the Montreal area,” said Charles Brant, of QPAREB. “The strong price increases will thus become increasingly anecdotal over the next few months with a level of overbidding that is bound to fade.”
Source: Quebec Professional Association of Real Estate Brokers (QPAREB)
Benchmark Price (all housing types):$546,000
New listings: 4,577
Active listings: 5,206
“While higher lending rates are weighing on sales activity, the market is still struggling with supply levels and rising prices which could also be contributing to slower sales, especially in the detached market,” said CREB Chief Economist Ann-Marie Lurie. “Nonetheless, if this shift continues, we could begin to see more balanced conditions in the market over the next several months, slowing the pace of price growth in the market.”
“With year-over-year resales declining in March and April, and now with this downward trend continuing into May, traditionally the highest performing month for resales, it is quite clear that Ottawa’s resale market is shifting away from the blazing pace of 2021,” said Ottawa Real Estate Board President Penny Torontow. “…another statistic that we see increasing is the cumulative days on market (CDOM), which is now 14 days, increasing from 11 days last May.”