The question after a tough 2022: How much further do real estate prices have to fall?
Home prices in Canada’s biggest markets ended 2022 well below the soaring peaks posted earlier in the year. Now the question is: How much further do they have to fall?
According to local real estate boards, the composite benchmark price for a home in the Greater Toronto Area (GTA) peaked at $1,370,000 in March of 2022, while homes in Vancouver topped out at $1,374,500 in April and Calgary homes hit a high of $546,000 in May.
When comparing each region’s peak against December’s benchmark price results, Toronto, Vancouver and Calgary have dropped by 21 per cent, 19 per cent and nearly five per cent, respectively.
In all cases, the declines commenced after the Bank of Canada began to raise interest rates in March — whether prices continue to fall in 2023 may depend as much on the path of interest rates as anything else.
BMO chief economist Douglas Porter, for one, projects that high interest rates will continue to pummel the housing market in 2023, predicting home prices slip another 12 per cent and sales fall another 15 per cent.
