Since March, the Bank of Canada has raised interest rates six times, with the most recent hike in October. While rate increases were rumoured at the start of the year, this many were unexpected for many. July’s increase of 100 basis points was the largest in Canada since 1988. The final announcement of 2022 is expected in early December, bringing about a potential seventh rate hike in nine months. Home prices have taken a hit due to the rising rates, with some provinces and cities feeling the impact harder than others. While there have been major declines in some areas, a few have also remained relatively steady over the past seven months. We took a look at major provinces and cities across Canada and in the Greater Toronto Area (GTA) to see how home prices have changed since February, the month prior to the Bank of Canada’s initial rate increase.
How Home Prices Across Canada Have Changed Since February 2022
The provinces with the most expensive real estate markets experienced the greatest price dips this year. Ontario’s prices have dropped 18.26% from $1,075,800 in February to $879,400 in October, while British Columbia’s prices have fallen 8.51% from $1,048,900 to $959,600 over the same period.
On the other hand, some provinces only experienced minor price dips while others actually have experienced price growth since February. The average price in Prince Edward Island has appreciated 10.10% to $362,900, and Newfoundland’s price has increased by 6.22% to $281,600. This price growth could be a reflection of the increasing demand for more affordable housing, as well as out-of-province buyers migrating to more affordable areas.
Alberta has remained relatively flat throughout 2022. The average price in the province dipped by just $2,000 since February, from $459,300, to $457,200 in October. A small difference of just 0.5% which has led to a comparatively stable market.
Looking at some of the major cities across Canada provides another perspective. Using data provided by the Canadian Real Estate Association (CREA), we took a more in-depth look at some of the major cities across Canada to see if prices reflected the numbers of their provinces.
Ontario cities continue to show the greatest price decreases. London-St. Thomas and Kitchener-Waterloo have experienced price depreciation of 25% and 24.5% respectively, while Hamilton-Burlington has fallen 21.71% from $1,068,800 in February to $836,800 in October. In British Columbia, Vancouver has had a 7.18% decline, while Victoria’s price has actually risen by 2.30%, despite the overall decline in the province. In Alberta, the price has remained steady, however, Edmonton’s average home price has fallen by 4.02% to $372,400, while Calgary has experienced a small increase of 0.83%. Cities such as Halifax and Saint John are consistent with the overall trend in their provinces.
How Interest Rates have Changed Home Prices Across the GTA
As Ontario has had the largest dips across the country, we took a closer look at major markets in the GTA using data provided by the Toronto Regional Real Estate Board (TRREB).
All of the above cities have experienced price declines. The smallest decline was seen in the City of Toronto, with a 9.73% drop from $1,210,889 in February to $1,093,097 in October. The greatest decline was in Brock, falling from $1,168,477 to $805,653 over the same period, a decline of 31.05%. In October, Mississauga fell below the $1,000,000 price range, down 19.42% from February to $987,356. Markham was the only other city in the GTA that had a price decline of less than 20%, down 17.73% to $1,282,561.
Housing prices in every city covered by TRREB have declined since February. Many insist that rising interest rates are the culprit driving prices down in Ontario. As the cost of borrowing has increased in already costly markets, some prospective buyers have been priced out or are waiting on the sidelines for interest rates to come back down.
Although markets across the country have experienced many changes this year, some buyers have been able to secure homes for lower prices in major markets because of the downward pressure on prices which has led to more buying power. Speak to an experienced real estate agent if you’re considering getting into the market, they’ll help you make sense of trends in your area and secure your dream home at the best price.