House prices in Canada appear to be stabilizing after last year’s sharp fall. Even so, uncertainty over future interest rate changes, tight inventories and weak housing starts means the market isn’t yet firing on all cylinders.
Meanwhile, asking rents have also flattened out – but from the opposite direction after a period of sustained growth. Some hot rental markets are still enjoying growth, although not at the same level as last year.
- After falling over the winter, house prices are now leveling off. The Canadian Real Estate Association’s MLS Home Price Index fell 1.1% month on month in February, and 15.8% year on year. Earlier this year, CREA predicted that house prices would fall by 5.9% in 2023.
- In Ontario, the average sold price rose by 8.3% from January to February, reaching $865,279. However, that’s still down 20.0% on February 2022.
- Inventories are also looking healthier in major cities, according to Zoocasa’s expert panel. In the Greater Toronto Area, the number of properties listed for sale picked up by around 9% month on month, but average national inventory still stands at just 4.1 months, lower than in January.
- Market experts predict that house prices will further stabilize as priced-out buyers, attracted by falling prices, return to the market to boost demand. If the Bank of Canada keeps interest rates steady, consumer confidence is likely to increase further.
- The seasonally adjusted annual rate (SAAR) of housing starts fell slightly in February, reports the Canadian Mortgage and Housing Corporation. But some markets bucked the trend – including Toronto, which saw a 55% rise in SAAR.
- Canada-wide, asking rents rose by 10.8% from March 2022 to March 2023, according to Rentals.ca. The data also recorded the first month-on-month increase in rents after three consecutive months of falls.
- The same report by Rentals.ca found that asking rents have stalled in major Ontario markets. One-bed and two-bed rents were almost static Toronto, while in Ottawa one-bed rents fell month on month.
- In the single-family rental space, the average asking rent for a house or townhouse was $2,216 in March, up 8.7% on a year earlier.
- Those rising rents are buoyed up by a growing shortage of rental units. Research by the Royal Bank of Canada found that the shortfall could grow from 30,000 units this year to 160,000 in 2026.
Other housing market headlines
Majority of Canadians who don’t own a home have ‘given up’ – Global News
Toronto home prices rise as competition heats up in tight market – Financial Post
These Ontario cities are expected to see the biggest home price declines – CTV
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