Canada’s housing market is off to a cold start in 2023, as both homebuilding and sales activity show multi-year lows.
**Canadian Mortgage Interest Rate Hike and Real Estate Market Correction to Buyer’s Market.**
As per Canada Real Estate Association (CREA) homebuying hit a 14-year low for the month of January. Sales volume was 37.1 per cent below the same month last year, the second-best January ever on record.
Sales were down three per cent on a month-over-month basis, which as per CREA effectively gave back small gains seen in December 2022.
In non-seasonally adjusted terms, the national average home price in Canada was $612,204 in January, down 18.3 per cent year over year.
CREA’s benchmark Home Price Index is now down 15 per cent from the peak seen in February 2022.
Prices drops are steeper in some Ontario and B.C. markets, but CREA flagged Calgary, Regina and Saskatoon, and St. John’s, N.L., as some cities where prices are holding steadier.
Some real estate markets appear to have already hit their bottom and are seeing prices trend up on a monthly basis.
The housing market had “a lot to struggle with” in January, factoring in the implementation of a new foreign buyer ban and anti-flipping tax from the federal government.
Bank of Canada continued its interest rate hike campaign with a cumulative 75 basis points of increases to its policy rate across December 2022 and January 2023. As such, current falling sales and prices last month are not much of a surprise.
Evidently price wise it’s a better time for buyer to take advantage of Buyer’s Market situation now.
There are predictions from Bank of Canada says they won’t raise the rate in near soon but they did not remark they might even reduce it as well.
Looks like Spring 2023 market condition looks more like Buyer’s Market. Buyers will dominate the deal as there are predictions.