A closer look at CREA’s numbers

Canada’s average home price may have shown the most precipitous decline since the recession, but one industry veteran sees the silver lining

“Despite all the stuff happening in the Greater Golden Horseshoe the numbers aren’t dramatically different than we expected. We’re pretty well on par,” Christopher Alexander, regional director with RE/MAX, told Canadian Real Estate Wealth. “There were significant changes the government introduced on April 20 and any time that happens sometimes drastic outcomes can happen. I’m actually pretty pleased.”

Canada’s average home price dropped 1.5% to $607,100 month-over-month, which is the largest decline since 2008’s recession.

Toronto led the charge with its own 4.7% month-over-month dip.

The reason for the GTA’s cooling, according to many pundits, is the Ontario Fair Housing Plan, introduced in April, which included a foreign buyers tax and other measures meant to address affordability issues.

That, coupled with increased mortgage rates, has many Canadians sitting on the sidelines and waiting to see how it all shakes out.

However, some – including the Canadian Real Estate Association – believe the most precipitous declines may have already been felt in Toronto.

“July marked the smallest monthly decline in Greater Golden Horseshoe home sales since Ontario’s Fair Housing Plan was announced in April,” said Gregory Klump, CREA’s Chief Economist. “This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that’s indeed the case once the transitory boost by buyers with pre-approved mortgages fades.”

Newly listed homes dropped 1.8%, led by a decline in the GTA.

“Many other markets in the Greater Golden Horseshoe region have also seen new supply pull back recently after having jumped immediately following the Ontario government’s announcement of its Fair Housing Plan in late April,” CREA said.

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COMMENTS

  • by Bill Hubbard of Century 21 Executives in Vernon BC 2017-08-16 11:43:45 AM

    I have a bone to pick with virtually all Real Estate oriented magazines including this one. If a car lot under sells the last Mustang on the lot to get rid of it does that mean the price of cars is going down? The average sale price on the lot may have dropped slightly but the value of other Ford models would not be even slightly affected. Why; because they are totally different models. This analogy can be applied to the Real Estate market. Reporters keep looking at the Real Estate Market like they look at the stock market. The stock market is a global entity or at least a national entity in each country. The Real Estate market is incredibly local. There are approximately 100,000 Real Estate boards in Canada and virtually every one of them has a different market. Right now reporters are saying that Canadian Real Estate sales and prices are dropping. That is true and false all at the same time. Toronto Real Estate prices and sales are dropping significantly because of political changes in the last few months. Because Toronto is the largest economy in the country it is skewing the stats across the country when they are all clumped together. Vancouver sales and prices are rising again, the Okanagan Shuswap is in a boom market, Calgary and Edmonton are starting to recover from their oil price affected market and Saskatoon is seeing a slowdown. The markets are all different and in my opinion it is irresponsible to clump them all together and say "Canadian Real Estate prices and sales are dropping" because they are dropping in Toronto. Most consumers see this as a threat to the value of their home no matter what their market is doing. I am sure this article will get me in some hot water but I think it is irresponsible for reporters not to vet their information based on the "inaccurate impression" it will give consumers.

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