October 14, 2023 | The Most Splendid Housing Bubbles in Canada: Prices Drop Further as Sales Slow and New Listings Jump Further

The Canada Home Price Benchmark Index for single family houses in fell for the third month in a row, in September by 1.3% from August, after having dropped by 1.1% and by 0.5% in the prior two months, to $815,300 (all prices in Canadian dollars).

The three months in a row of declines came after a wild and woolly sucker rally in the spring, fueled by the spring buying season and fake hopes about rate cuts. But the Bank of Canada instead went on to hike rates further to 5.0%, and at the last meeting added a further tightening bias, while inflation has begun to resurge across the board, topped off with Canada’s worst rent inflation since 1983.

The breathtaking price plunge last year forms the base for this year’s year-over-year comparison; and after the wild and woolly sucker rally this spring, the benchmark price is up 1.6% year-over-year. Since the peak in March 2022, the benchmark price has now dropped by 14.2%, or by $135,300, according to data from the Canadian Real Estate Association (CREA) on Friday.

Sales dropped, supply rose. Home sales fell 1.9% in September from August, the third month in a row of declines. New listings “jumped” by 6.3% month over month, according to CREA. Since the low in March, new listings have surged by 35%. Supply rose to 3.7 months, over double the level of the pandemic low. “The recent trend of slowing sales and rising new listings continued in September,” CREA said.

Greater Toronto Area (GTA): The MLS Home Price Benchmark Index for single-family houses fell by 1.5% in September from August, after having fallen by 1.7% and by 0.8% in the prior two months, to $1.345 million.

From peak in February 2022, the index has dropped 15.4% or by $245,600. Due to the plunges last year during this time frame – the base for the year-over-year comparison – and the effects of said wild and woolly rally in the spring, the benchmark price was up 3.7% year-over-year.

These kinds of free-money-spike-and-end-of-free-money plunge would be hilarious, if they weren’t so serious.

In the Hamilton-Burlington metro (part of the “Greater Toronto and Hamilton Area” or GTHA), the single-family benchmark price fell by 1.3% in September from August, to $918,000.

From peak in February 2022, the price has dropped by 20.8%, or by $240,900. Given the plunge last year at this time that had followed the spike in the spring, the price in September was up 2.7% year-over-year.

Greater Vancouver: The MLS Home Price Benchmark Price for single-family houses dipped 0.1% in September from August, to $2.018 million:

• From peak in April 2022: -4.0% or -$83,900
• Year-over-year: +5.3%

Victoria: The single-family benchmark price fell 0.8% in September to $1.169 million:

• From peak in April 2022: -9.7% or -$125,000
• Year-over-year: +0.5%

Ottawa: The benchmark price of single-family houses fell by 1.3% in September, to $727,500:

• From peak in March 2022: -11.6% or -$95,700
• Year-over-year: +0.6%.

Calgary: The single-family benchmark price edged down by 0.1% from the record in the prior month, to $633,300, and was up by 9.6% year-over-year:

Montreal: The single-family benchmark price was unchanged for the month at $610,800:

• From peak in May 2022: -5.7% or -$36,800
• Year-over-year: +2.6%

Halifax-Dartmouth: The single-family benchmark price fell by 1.9%, to $534,300:

• From peak in April 2022: -7.8% or -$45,200
• Year-over-year: +8.3%.

Quebec City Area: The single-family benchmark price fell by 1.6% from the record in the prior month, to $383,300, and was up by 5.4% year-over-year:

Wolf Richter October 14th, 2023

Posted In: Wolf Street

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