Canadian home prices fell 6 percent to $ 746,000 in April as high interest rates flooded the hot real estate market.
The Canadian Real Estate Association said Monday that home sales fell 12 percent in April, with the biggest drop coming from major cities like Toronto.
In February of this year, prices reached a record high of more than $ 816,000, and average home prices have now fallen for two months in a row. The average price in March was $ 796,000, while in April it fell by 6%, which is usually a strong month for the housing market.
“After a record number of years, housing markets in many parts of Canada have frozen sharply over the past two months, driven by rising interest rates and buyer fatigue,” said CREA President Jill Odile in a statement.
CREA says the average selling price can be misleading as it easily deviates from big sales in big cities like Toronto և Vancouver. It highlights another number, called the Housing Price Index, as a better measure of the market, as it adjusts to the volume և of homes sold.
HPI fell 0.6 percent in April, the first monthly decline in two years.
The prices have dropped from their last peak, they are about 7% higher than a year ago.
However, the figures paint a picture of the housing market, which froze just a few months ago from its hectic activity.
“During a pandemic, a huge rush of more expensive units (such as private homes) could lead to a sharper decline,” said TD Bank economist Rishi Sondhi in a customer note.
“As we move forward, we expect prices to continue to fall, reflecting a colder demand.”
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