Where home prices are falling fastest

July 8, 2022



The latest data from the Canadian Real Estate Association shows average prices at the national level trending down over the past few months. In May, the average home price was $711,316—down 4.6 per cent from April and almost 13 per cent from peak levels in February.
Outside of national headline statistics, there are regional and local dynamics at play. Keith Lancastle, CEO of the Appraisal Institute of Canada, said it is difficult to point to any high-level trends around appraisal values. “Markets are inherently local,” he told Canada Mortgage Trends. “For that matter, every transaction is a unique transaction.”
Lancastle said he’s seen house prices drop 20 per cent from their peak in cities around Toronto—particularly Oshawa and Hamilton. Over the last eight months to a year, he said, people looking for more space left Toronto for the suburbs and beyond, and this drove up prices in smaller cities including Ottawa.
“We saw, during the pandemic, a 20 per cent plus increase in the value of residential real estate in the Ottawa market year-over-year,” Lancastle said. “I’ve lived here for 30 years and that’s unprecedented during that time.”
But prices are now falling. According to a June 2022 report from Desjardins Economic Studies, the Maritime region is expected to see a 20 per cent decline in home prices between February 2022 and December 2023. Ontario home prices could drop by 18 per cent, British Columbia by 15 per cent and Quebec by 12 per cent.
Meanwhile, the city of Toronto itself didn’t grow at the same rate as the Greater Toronto Area at large. Lancastle used the Automated Valuation Model, a real-time estimate of Canadian market value, to assess a condo bought by a client at $1.35 million. “It came back spot-on,” he said. A similar situation is playing out in Metro Vancouver, one of the hottest housing markets in the country. According to May 2022 data from the Real Estate Board of Greater Vancouver, the benchmark price for a detached home was just over $2 million—down 0.4 per cent from April.