In recent updates from Statistics Canada, the landscape of Canada’s housing market shows a subtle but noticeable uptick. Since August 2022, the New Housing Price index in May reveals a 0.1% month-over-month increase. Surveying 27 major areas, six saw price hikes, eight experienced drops, and 13 remained stable.
Despite this recent rise, comparing year-over-year data, house prices actually fell by 0.6% since May 2022, indicating a mixed bag for potential homebuyers.
A Closer Look at May’s Housing Prices
The trend seems to vary widely across Canada. In May, cities like Victoria faced the steepest year-over-year decline at 2.7%, with St. Catharines–Niagara and Edmonton not far behind. On the flip side, Québec City saw a significant boost of 4.1%, with Charlottetown and St. John’s marking gains as well.
Interestingly, some cities like Greater Sudbury and Sherbrooke saw notable month-over-month declines, attributed to weaker local market conditions by home builders.
Where to Find Affordable Housing?
A recent Point2homes report shines a light on affordability, particularly in Canada’s prairie provinces. Cities like Regina, Calgary, Edmonton, Saskatoon, and Winnipeg are highlighted as havens for affordable housing, with the region seeing a year-over-year price dip of 0.8%.
This aligns with findings from the Canadian Home and Mortgage Corporation (CMHC), which credits the prairie provinces’ stability to a lesser decline in construction activity compared to other regions.
The Impact of High Interest Rates
The Bank of Canada’s decision to hike interest rates to 4.75%—a peak not seen since 2021—adds another layer of complexity. This move, aimed at curbing inflation by slowing spending, directly influences the affordability of major purchases like homes. With mortgage rates climbing, both Canadians and newcomers face heightened challenges in securing affordable housing.
Statistics Canada links these higher interest rates to decreased activity in the housing market, noting a significant increase in unabsorbed inventory. This suggests a growing number of houses are being built but remain unsold, further complicating the market dynamics.
What This Means for You
For anyone eyeing the Canadian housing market, these trends underscore the importance of staying informed and prepared. While some regions offer more affordable options, the overall landscape is shaped by fluctuating prices and high interest rates. As Canada grapples with balancing growth and affordability, potential homebuyers must navigate these waters carefully, keeping an eye on both regional trends and the broader economic climate.
