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.
by José Gonçalo
Home prices in Canada: The time to realize the dream of home ownership by paying less may have arrived!
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!
BMO CashBack® World Elite® Mastercard® credit card full review
The BMO CashBack® World Elite® Mastercard® credit card is a complete solution: 10% cashback and many other benefits. Learn more!
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.
You will be redirected to another website
The reason for the drop in home prices
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?
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!
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.
Buy cheap British Airways flights: easy step by step
Learn how to buy cheap British Airways flights with 50% discounts and how to travel for free to any national and international destination!Keep Reading
Chase Freedom® Student credit card full review: should you get it?
Meet the Chase Freedom® Student credit card—the credit card made for students—with cash back and an interesting APR rate. Read on!Keep Reading
Don’t make these 7 common budgeting mistakes
Some budgeting mistakes can stand in the way of you and your financial goals. Read on to learn how to identify and fight them!Keep Reading
You may also like
Aspire® Credit Card full review: should you get it?
Read a complete review of the Aspire® Credit Card, which is a tool for building credit regardless of your score. Read on to find out.Keep Reading
Capital One Low Rate Guaranteed Mastercard® card: check out how to apply!
Apply for the Capital One Low Rate Guaranteed card and have great tools to build credit: Mastercard® benefits and low APR.Keep Reading
College Ave Student Loan: find out how to apply!
Apply to College Ave Student Loan and get great APR for any student level, up to 15 years of repayment, and no additional fees. Know how!Keep Reading