The real estate market was as cold as the weather in February – all in terms of housing starts, home prices and sales.
The annual pace of housing starts – new housing construction projects – slowed due to softened demand for housing, according to Canada Mortgage and Housing Corporation (CMHC). The seasonally adjusted annual rate of housing rates dropped to 173,153 units compared with 206,809 units in January.
The overall decline in the pace of housing starts came as the annual rate of urban starts dropped by 18% last month to 155,663 units. The pace of multiple-unit urban projects like condos, apartments and townhouses fell by 20.2% to 116,284 units, while single-detached urban starts dropped by 10.6% to 39,379 units. Meanwhile, rural starts were estimated at a seasonally adjusted annual rate of 17,490 units.
Home prices plunged for the fifth straight month, with most major markets joining the downward trend.
The Teranet-National Bank of Canada House Price Index (Teranet HPI), which captures movement in home prices for resales, was down by 0.4% from January. Last month’s drop was the largest February drop since 2009.
Compared to last year, the Teranet HPI remains 1.87% higher. The year-over-year increase, however, is the third smallest outside of the recession, with only July and August coming in smaller.
Toronto fell further from the peak. Prices dropped by 0.22% last month, but they remain 3.56% higher on a yearly basis. Peak prices were hit in July 2017 and are still 4.04% lower compared to the 3.83% gap from the month before.
Vancouver made the second largest drop in the Teranet HPI. Prices dropped by 0.68% last month and were down by 1.11% from last year. Peak prices were hit in July, and the market is down by 3.87% from that level.
Meanwhile, Montreal made the largest monthly gain, hitting a new all-time high. Prices rose by 0.36% last month, bringing them 5.15% higher than last year, according to Better Dwelling.
However, among 11 metropolitan areas in the country, Calgary’s home prices fell the fastest, down by 0.8% on a monthly basis and off by 2.7% on a yearly basis. In a report, Teranet and National Bank said that it was the eighth consecutive month that the city did not experience an increase in prices.
The Canadian Real Estate Association (CREA) reported that only 29,974 residential properties changed hand across the country last month, down by more than 9% from January, the biggest monthly slowdown since the federal government implemented new mortgage stress test rules last year.
In Calgary, only a total of 2,252 homes changed hands so far this year, down by 10.9% from the same month last year. Toronto sales also dropped on a year-over-year basis, down by 2.4%.