A report by Re/Max Canada forecasts the national average home sale price in Canada will fall 2.2 per cent in the final months of the year.
The network of real estate brokers and agents said Wednesday the moderation in the market for the September-to-December period comes amid rising interest rates, record inflation and broader global and economic uncertainties.
Mortgage rates have risen sharply this year, raising the cost of borrowing for potential buyers.
Re/Max Canada president Christopher Alexander said many markets are experiencing softer sales given the recent interest rate hikes.
“This provides some reprieve from the unprecedented demand and unsustainable price increases we’ve seen across Canada through 2021 and in early 2022,” Alexander said in a statement.
“However, the current lull in the market is only temporary. Until housing supply increases, these ‘boom’ and ‘bust’ cycles will likely be a recurring event.”
Prices in Metro Vancouver are expected to decline 3.0 per cent, while the Greater Toronto Area is forecast to fall 6.3 per cent. Winnipeg is expected to drop 8.0 per cent.
However, the drop in prices in the final months of 2022 isn’t expected to be universal. The report said seven out of the 30 markets analyzed are likely to experience modest price appreciation between 1.5 and seven per cent.
Calgary is expected to rise 3.0 per cent, while Edmonton is forecast to gain 1.5 per cent. St. John’s, N.L., is predicted to gain 7.0 per cent.
The report follows a move by the Canadian Real Estate Association earlier this month to cut its forecast for home sales this year and lower its expectations for price growth.
CREA is expecting 532,545 properties to trade hands via Canadian MLS systems this year, down 20 per cent from the 2021 annual record, while sales are expected to drop another 2.3 per cent in 2023.
The association also forecasts the national average home price is forecast to rise by 4.7 per cent on an annual basis to $720,255 by the end of the year and edge up another 0.2 per cent to $721,814 in 2023.
The outlook is down from CREA’s forecast in June that predicted a 14.7 per cent decline in sales this year and a 10.8 per cent increase in the national average home price.
This report by The Canadian Press was first published Sept. 28, 2022.