13 Jan Royal LePage House Price Survey
Royal LePage House Price Survey
Canadian home prices wrap up 2022 down slightly over previous year, but remain above pre-pandemic levels
For the first time in more than a decade, the aggregate price of a home in Canada posted a year-over-year decline in the fourth quarter of 2022. According to the Royal LePage House Price Survey, the aggregate price of a home in Canada decreased 2.8% year-over-year to $757,100 in the final quarter of 2022; the first year-over-year decline recorded since the end of 2008 during the global financial crisis.
Broken out by housing type, the national median price of a single-family detached home declined 3.7% year-over-year to $781,900, while the median price of a condominium increased 1.4% to $561,600.
“Canada’s housing market closed out 2022 much as expected – with activity way down compared to the hypercharged state we became accustomed to over the better part of the last two and a half years – and home prices continued to show modest quarterly declines, with those declines steadily decreasing,” said Phil Soper, president and CEO of Royal LePage. “While the red-hot market conditions we experienced during the pandemic real estate boom are behind us, there remains a fundamental shortage of housing supply in Canada that cannot be offset by temporarily cooling demand.”
While home prices declined on a yearly basis in the fourth quarter of 2022, it is worth noting that prices in the same quarter in 2021 were close to their peak, and remain elevated compared to pre-pandemic levels. High levels of employment, strong household savings, and growing household formation continue to support Canadian home prices.
“While demand has slowed in this rising interest rate environment, we know that many families waiting on the sidelines have the capacity to buy and have chosen not to, waiting for conditions to stabilize. Soon enough, these buyers will return to the market and will be met, once again, with the realities of low inventory and much competition,” said Soper.
In its 2023 Market Survey Forecast released in December, Royal LePage projected that the aggregate price of a home in Canada will decrease a modest 1.0% in the fourth quarter of 2023, compared to the same quarter in 2022.
Read Royal LePage’s fourth quarter release for national and regional insights.
Fourth quarter press release highlights:
- Prices remain above pre-pandemic levels: Canada’s Q4 2022 national aggregate home price has appreciated 13.8% vs. Q4 2020, and 17.2% vs. Q4 2019
- Greater regions of Toronto and Vancouver record year-over-year aggregate price declines of 4.6% and 3.5% respectively in Q4 2022, while the Greater Montreal Area posts a gain of 2.2% in the same period
- Less than 1% of all homes in Canada were purchased during the peak price period of February and March, 2022
The aggregate price of a home in Ottawa decreased 2.7 per cent year-over-year to $719,900 in the fourth quarter of 2022. On a quarterly basis, the aggregate price of a home in the region decreased 3.3 per cent; the third consecutive quarterly decline recorded.
Broken out by housing type, the median price of a single-family detached home decreased 5.7 per cent year-over-year to $826,300 in the fourth quarter of 2022, while the median price of a condominium decreased 8.1 per cent to $383,700 during the same period.
“Real estate in Ottawa is trending back toward pre-pandemic norms, resulting in healthier market conditions for all. Home prices continued to decline from pandemic highs in the fourth quarter as inventory showed some improvement,” said Jason Ralph, broker of record, Royal LePage Team Realty. “The slowdown in the market is partly due to a chicken or egg scenario – many buyers are holding out for a bargain as prices continue to dip, and some sellers have refrained from listing their homes as they wait for purchaser demand to rise. Although many buyers have chosen to put their purchase plans on hold while they wait to see what interest rates do next, we know that there is a lot of pent-up demand waiting in the wings, especially in the first-time buyer segment. I expect that demand will return once interest rates stabilize.”
Ralph noted that homes in suburban regions surrounding downtown Ottawa have proven to be more resilient to price declines, as retirees and first-time buyers move to the city’s outskirts in search of more space and affordability. Should interest rates stabilize during the first few months of 2023, Ralph anticipates that more sellers will list their homes.
“All signs are pointing to a more balanced market in 2023,” said Ralph. “Interest rates and inflation have been key indicators of real estate activity of late. A levelling off or drop in borrowing rates will boost consumer confidence, resulting in an increase in activity in the Ottawa market.”
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Ottawa will increase 2.0 per cent in the fourth quarter of 2023, compared to the same quarter in 2022.
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