Average house price in Canada fell 11% in past year, CREA says
Sales in April dropped to their lowest monthly level in 7 years, association reports
The average price of a Canadian home declined by more than 11 per cent in the 12 months up to April, the Canadian Real Estate Association said Tuesday.
The realtor group said the number of sales plunged by 13.9 per cent compared with the previous year's level, and fell to the lowest April showing since 2011.
April is typically a booming month for home sales, as warmer weather spurs sales. But listings slowed from March's level during the month, coming in 4.8 per cent lower. It was the slowest April for new listings in nine years, CREA said.
Sales were down in 60 per cent of all markets, led by the Fraser Valley in British Columbia, along with markets in and around the Golden Horseshoe area in southern Ontario.
The realtor group placed the blame in part on new stress test rules aimed at tightening lending standards, which came into force in January.
"The stress test that came into effect this year for homebuyers with more than a twenty per cent down payment continued to cast its shadow over sales activity in April," CREA President Barb Sukkau said in a release.
Sales were down, and so were prices. CREA said the average price of a home sold last month went for $495,000. That figure has fallen by 11.3 per cent from April 2017.
But as has been the case for several months, CREA said activity in Toronto and Vancouver is skewing the markets. When both markets were red hot, they were pushing the average up. But now that both markets have cooled, they are pulling it lower.
If sales from those two markets are stripped out, CREA says the average selling price of a Canadian home in April was $386,100, and the annual decline shrinks to just 4.1 per cent.
"This was a disappointing report," TD Bank economist Rishi Sondhi said after the numbers came out. "Sales fell during April while revisions to March painted a weaker picture of activity than originally thought."
Sondhi said the new stress test rules, along with new taxes on foreign buyers in Ontario and British Columbia "will continue to weigh on activity and sentiment."
But "ultimately, signs of stabilization should emerge later in the year and into 2019, amid healthy labour markets and ongoing population growth," Sondhi said.