While the aggregate home price for the three-month period ending in September rose 3.6 per cent over last year’s level to $802,900, it was down 0.8 per cent on a quarter-over-quarter basis.
Toronto and Vancouver both recorded price declines in the third quarter — 2.8 per cent and 1.8 per cent respectively — while prices in the Greater Montreal Area ticked up by 0.6 per cent. Broader market activity was subdued, with 57 per cent of the regional markets cited in the study experiencing downturns in the third quarter.
Detached single-family homes saw their median prices climb 3.4 per cent from the previous year, reaching $833,600. Condominium prices were not far behind, up 3.8 per cent with a median of $587,400.
Even with the recent increases, the aggregate home price in Canada is still 6.3 per cent below the peak of Q1 2022 — the height of the pandemic-fuelled real estate boom.
“While trading volumes in most regions remain sluggish, Canada’s housing market is on solid footing, with pent-up demand building,” said Phil Soper, the president and CEO of Royal LePage.
Soper noted in the report that a lull in activity has caused a slight increase in housing inventory in some regions. However, the available homes for sale still fall short of what’s necessary to keep property prices in check.
He said the housing market still faces multifaceted challenges, such as the extended lifespans of the baby boomer generation, shifts in the structure of Canadian households and a large influx of immigrants.
Soper predicted a resurgence in the real estate market once interest rates begin to ease.
“Looking back over the past half century, today’s mortgage rates are in a normal range, and well below the double-digit lending rates of the 1980s,” he said. “It is the large gap between Canadians’ hyper-low, pandemic period mortgages and today’s rates that have stifled activity. As with the introduction of the mortgage stress test, the market will adjust. It just takes time.”
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Although Royal LePage had to adjust its projections — the firm now expects fourth-quarter home prices to be seven per cent higher than in 2022, down from a previous forecast of 8.5 per cent higher — Soper remained optimistic.
“While activity has softened in recent months and inventory is rising, we strongly expect that home prices will hold firm through the remainder of the year, with modest increases in some markets,” he said.
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