The Canadian Real Estate Association has lowered its sales and price forecasts for the remainder of 2023 as rising interest rates weigh on the housing market.
CREA said in a news release that the national average price of a home is expected to fall 3.3% annually to $680,686 this year, a downward revision from its previous forecast. The association said the changes were primarily due to declining sales in Ontario and British Columbia, which are the country’s most expensive markets for real estate.
The revisions come as Canada’s housing market slowed again in September, with sales falling, the number of properties surging and prices falling slightly.
According to CREA, national home sales in September decreased by 1.9% on a monthly basis, the third consecutive month of decline, but increased by 1.9% from a year earlier.
“Recent trends of slowing sales and increasing number of new listings continued in September,” CREA Chairman Larry Sarqua said in a release.
“This is an opportunity for buyers, but many of them seem content to sit on the sidelines until there is further evidence that interest rates have indeed finally peaked. Sellers have also joined in, meaning the market is likely to remain depressed into next year.”
The MLS Home Price Index, which CREA says is a more accurate price comparison than the median or average price, fell 0.3% on a monthly basis, the first decline since March. The cause of the decline was low prices in Ontario.
“Data coming in over the next few months will determine whether Ontario is an outlier or the first province to exhibit the price softening trend expected in at least other parts of the country. Where are interest rates?” said CREA.
This will continue in the future.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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