Real estate company Royal LePage has lowered its growth forecast for Canadian home prices
this year as the national housing market continues to slow due to rising interest rates.
The realtor now forecasts that the price of a home in Canada in the fourth quarter of this year
will be 5% higher than in the same period last year. That’s down from an April forecast of a 15%
year-over-year price increase.
Royal LePage says it lowered the forecast due to the aggressive interest rate increases being
undertaken by the Bank of Canada to dampen inflation that is at a 40-year high.
In its latest survey of Canada’s housing market, Royal LePage said the price of a home during
this year’s second quarter was $815,000, up 12% from a year ago. However, the average home
price was down 4.9% from the record high reached in this year’s first quarter.
Royal LePage said the second quarter marked the first time in three years that home prices
declined on a quarter-over-quarter basis.
Higher interest rates are carried over to mortgages making it more expensive for consumers to
buy a house and make monthly payments.
