The aggregate price of a home in Canada during the third quarter increased 3.6% year-over-year, according to the newly published Royal LePage House Price Survey.
On a quarter-over-quarter basis, the national aggregate home price dipped by 0.8%, which the survey’s authors claimed was evidence of Canadians adjusting to the new normal of elevated interest rates and increased borrowing costs.
When broken out by housing type, the national median price of a single-family detached home increased 3.4% year-over-year to $833,600, while the median price of a condominium increased 3.8% from one year earlier to $587,400. On a quarter-over-quarter basis, the median price of a single-family detached home decreased 1% and the median price of a condominium only registered a 0.1% uptick.
“With activity slowing, home prices softened in some of our major markets over the last three months, following a stronger-than-expected second quarter,” said Phil Soper, president and CEO of Royal LePage. “Prices remain up on a year-over-year basis, with today’s stable market standing in sharp contrast to the steep declines experienced in the third quarter of 2022.”
Soper added that although “While trading volumes in most regions remain sluggish, Canada’s housing market is on solid footing, with pent-up demand building. We don’t anticipate a material change in property prices through the remainder of the year. Slower activity has allowed critically low inventory levels to build marginally in many regions, yet the quantity of homes available for sale in this country remains well below the level needed to keep a lid on property price increases. We anticipate the growth of households to far outpace the current rate of new home construction.”
Looking ahead, Royal LePage is forecasting that the aggregate price of a home in Canada will increase 7% year-over-year in the fourth quarter. The previous forecast has been revised downward to reflect softer activity than expected in the third quarter, which resulted in a modest decline in prices in some markets, including Toronto and Vancouver.
“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,” said Soper. “Due to a more-sluggish-than-expected third quarter, we have revised our year-end forecast downward marginally. Overall, home prices will certainly close out the year above 2022 levels, when prices were nearing their lowest point in the post-pandemic correction.”