Prices rose in March, but are down 17.5% year-over-year, the second-worst in the data. Sales -34% year-over-year.
By Wolf Richter for WOLF STREET.
The spring selling season is now in full swing in Canada. So let’s see. Sales of all types of homes rose by 1.4% in March from February, after the 1.4% increase in February from January, so on a year-over-year basis, sales plunged by only 34% from a year ago, the smallest decline since September.
And the Canada Home Price Benchmark Index for single family houses jumped by 2.0% in March from February, as it should during spring selling season. For example, in March 2017, it jumped 3.7%; and in March 2016, it jumped by 2.6%. There were Marches when it rose less, but it tends to rise sharply in March, according to data from the Canadian Real Estate Association (CREA).
And so, compared to March last year, which was the peak, prices were down 17.5%, the second-worst decline in the history of the data going back to 2005, behind only February’s drop.
In dollar terms, the Single-Family Home Price Index for Canada rose by $15,400 in March from February, to $796,700, back where it had been in November. But year-over-year was still down by $169,500 (all prices are in Canadian dollars). Canada’s housing market didn’t reset during the Financial Crisis – unlike the US housing market – and after a small dip just kept ballooning.
These kinds of charts are just sort of funny. If money is free, prices don’t matter. And if money isn’t free anymore, well then.
The Bank of Canada’s free-money binge is over. This most splendid housing bubble took on mega-proportions in early 2020 when the BoC began its massive money-printing program – the infamous “quantitative easing” or QE – and pushed down its policy rates to near 0%.
All this ended over a year ago. The BoC’s has hiked its overnight rate by 425 basis points to 4.50%, and has indicated that there would be no rate cuts this year. Mortgage rates have risen across the board. And QT – “quantitative tightening,” the opposite of QE – is progressing just fine. Since peak-balance-sheet, total assets have now dropped by 34% to $382 billion:
Canada’s housing market reacts very quickly to changes in interest rates. The typical US mortgage of 30 years with a fixed interest rate and a fixed payment for 30 years doesn’t really exist in Canada, where mortgages are typically variable-rate or fixed-rate for short periods, such as five years. Many current homeowners, even those who don’t want to sell or buy, are soon feeling the pressure of higher mortgage rates. For a look at the complexities of the Canadian mortgage market, see our Introduction to Canadian Mortgages and Mortgage Insurance.
Greater Toronto Area: The MLS Home Price Index for single-family houses jumped by 2.8%, in March from February, to $1.33 million. So:
- From peak in February 2022: -17.0% or -$273,000
- Year-over-year: -16.9%
Greater Vancouver: The MLS Home Price Benchmark Price for single-family houses jumped by 2.7%, or by $48,400 in March from February, to $1.86 million. So:
- From peak in April 2022: -11.1% or -$239,600
- Year-over-year: -11.2%
Victoria: The single-family benchmark price dropped by 0.5% for the month, despite the spring selling season, to $1.11 million. So:
- From peak in June 2022: -14.8% or -$126,700
- Year-over-year: -10.3%
Hamilton-Burlington metro: The single-family benchmark price ticked up 0.4% for the month, to $900,900. So:
- From peak in February 2022: -22.7% or -$265,100
- Year-over-year: -21.8%
Ottawa: The benchmark price of single-family houses jumped 2.1% for the month to $702,800. So:
- From peak in March 2022: -14.9% or -$137,700
- Year-over-year: -14.9%.
Calgary: The single-family benchmark price jumped 2.1% for the month, to $597,200. So:
- From peak in May 2022: -0.3% or -$1,600
- Year-over-year: +1.5%.
Montreal: The single-family benchmark price jumped 1.7% for the month to $599,300:
- From peak in May 2022: -8.4% or -$55,200
- Year-over-year: -6.9%
Halifax-Dartmouth: The single-family benchmark price jumped by 2.6% for the month, undoing most of the plunge in February, after the jump in January. A little noisy, eh? To $504,300. So:
- From peak in May 2022: -9.7% or -$54,200
- Year-over-year: -5.6%.
Quebec City Area: The single-family benchmark price jumped 4.6% in March, after the 4.2% jump in February, to $378,200. So:
- From peak in May 2022: -2.4% or -$9,300.
- Year-over-year: -0.4%.
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.