Canadian home prices fall most in 14 months amid rate squeeze
CANADIAN home prices posted their biggest drop in more than a year as persistently high borrowing costs squeeze potential buyers.
The benchmark price of a home in Canada fell 1.1 per cent in November from a month earlier, the biggest decline since September 2022 and the third decrease in a row, according to data released on Thursday (Dec 14) from the Canadian Real Estate Association. The benchmark price now sits at C$735,500 (S$726,974), around where it was in May, the data show.
Borrowing costs at their highest level in more than two decades have sidelined prospective buyers and piled pressure on owners struggling with higher mortgage payments, with few signs of relief coming. The Bank of Canada held its benchmark rate steady for a third consecutive meeting earlier this month and signalled that rates could rise further if needed.
Both economists and traders are currently expecting the central bank to begin lowering interest rates sometime in the second quarter of next year, according to data compiled by Bloomberg.
With mortgage rates still high, home sales dropped 0.9 per cent in November from the previous month, according to seasonally adjusted data.
New listings fell by 1.8 per cent, after rising earlier this year, the real estate board data show. That pushed the sales-to-new listings ratio up to 49.8 per cent from 49.4 per cent in October, the first time that measure has increased since April, the CREA data show. Still, that ratio suggests the market remains looser than normal: its long-term average is 55.1 per cent.
More sellers were putting homes on the market earlier this year, but that’s now pulled back, according to Shaun Cathcart, CREA’s senior economist.
“Not getting offers they were willing to accept, it’s looking like many of them are also now resigned to hunker down until next year,” Cathcart said in a statement. “It’s probably a good move given that recent expectations around interest rate cuts suggest it might be a somewhat more active spring market than we thought.” BLOOMBERG
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