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Home prices in Canada have the first drop in 2 years

Home prices in Canada are actually lower, according to experts. However, is this the time to make your dream of a new house come true? Read this article and find out.

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Home prices in Canada: The time to realize the dream of home ownership by paying less may have arrived!

House composed of the phrase "for sale" (Home prices in Canada)
The average home price has fallen in Canada. However, is it time to buy? Read and find out. Source: Pixabay

After two straight years of rising, home prices in Canada gave the first sign of falling. The reduction in the average house price was significant and caught the attention of buyers. Some realtors also breathed a sigh of relief at the prospect of closing more deals in the future.

In fact, the reduction in prices is, in part, a reflection of the current state of the economy. However, it is also influenced by factors internal to the real estate market itself.

So, keep reading to better understand what is happening with the price of houses and, more importantly, the best time to buy them!

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Are house prices in Canada dropping?

Yes, it’s true: home prices in Canada are lower. According to the Canadian Real Estate Association (CREA), the average home price went from an average of $796,000 in March to $746,000 in April. In fact, the “discount” represented a drop of 6.3% in the average value of properties.

In addition, the organization’s Benchmark Home Price Index (HPI), a more accurate indicator for assessing price trends, also dropped 0.6%. While humble, the reduction was the first since April 2020.

The reason for the drop in home prices

Exterior view of the second floor of a sunlit home
There is a “culprit” behind the fall in home prices in Canada. Read and understand. Source: Pixabay

Most experts believe that this increase is a reflection of inflation in the country. In fact, Canada currently faces 6.8% inflation (April 2022), the highest in three decades. Rising inflation has driven up mortgage interest rates. Rising prices drove buyers away and caused sales to drop 12.6% on the month and 25.7% since April.

To give you an idea, in Toronto alone the drop in sales was 80%. So, with fewer people willing to buy a home, real estate companies were forced to lower prices to attract customers. In practice, there is a “compensation” due to the increase in mortgage interest.

How the decline in home prices in Canada will affect the real estate market

Despite the drop in Canadian home prices this month, this trend is not expected to continue in the coming months. The shortage of homes for sale should keep prices low and prevent a sharper drop.

However, it is still possible that lower-priced homes will continue to fall, according to Benjamin Tal, the deputy chief economist at CIBC World Markets. The expert estimates that low-rise buildings, depending on the area in which they are located, are already 15% to 20% cheaper.

Is it a good time to buy a house in Canada?

Sign advertising house for sale
Experts recommend: this is the time to buy your new home! Source: Pixabay

Thus, following the instructions of Benjamin Tal, it is possible to find good purchase options. However, finding really interesting prices will be easier for those looking for simpler homes. Thus, if this is the housing profile you are looking for today, it is worth researching the market.

This week, another piece of news shook the Canadian market: GDP fell. To understand what happened and what consequences, check out the link below!

Bear symbol of canada with a fish in its mouth with canadian flag in the background

Canadian GDP growth is slower than expected: understand the numbers

Canadian GDP slowed in the first three months of this year. Understand the consequences and what to expect for the future of the country.

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