Rapidly rising interest rates have resulted in the biggest one-month drop in Canadian home
prices since 2005.
According to the Canadian Real Estate Association (CREA), the average price of a home in
Canada fell 1.9% in June compared to May, marking the third consecutive month of declining
prices, and the biggest monthly drop since 2005.
With inflation running at a 40-year high, the Bank of Canada has aggressively raised the cost of
borrowing, boosting its trendsetting interest rate to 2.50% from 0.25% at the start of March.
That rapid increase in rates has led to a sharp cooling in the housing market as more buyers
find themselves unable to secure financing for a home purchase.
CREA said that home sales throughout Canada declined 5.6% on a month-over-month basis in
June.
Greater Toronto, the country’s largest housing market, has seen prices fall 4.5% over the past
three months, bringing the average home price down to $1.21 million.
The price decline has been even more dramatic in the Toronto suburbs, with Oakville recording
a 10% price decline in the last three months. Prices in the southern Ontario city of London have
fallen 13% in the last three months.
In Winnipeg, prices fell 2.4% in June. They also fell in the cities of Vancouver, Edmonton,
Montreal, and Halifax during the month.
CREA said that this year is the first time since 2019 that national home prices have fallen for
three consecutive months in Canada.
