Canadian real estate demand remains too weak to prevent further declines, but it’s improving. Canadian Real Estate Association (CREA) data shows the composite benchmark (typical) home fell in September. Over the past two years, prices have largely moved sideways as market uncertainty persists. However, price drops were smaller last month, implying the potential for a bottom—or at least some hesitancy over whether or not they should fall further.
Canadian Real Estate Prices Slip Lower, But Remain Range Bound
The composite benchmark home price, representing the price of a typical home across Canada. Based on existing home sales as reported through the CREA MLS.
Source: CREA; Better Dwelling.
Canadian home prices continue to slip lower, though they remain range bound. The benchmark price fell 0.6% (-$4,600) to $713,200 in September, leaving prices 3.3% (-$24,700) lower than last year. Almost all of the gains seen since the beginning of the year have been wiped out, with prices at a similar level to October 2021.
The benchmark lost a little steam, but this has become a common occurrence over the past two years. Asset prices moving horizontally between highs and lows typically indicate indecision. As prices fell, waves of buyers felt this was an attractive point to jump into the market again. However, just above this price point they’ve twice abandoned ship, indicating the market was too pricey. Lower prices and interest rates will make home buying more attractive at some point, but it’s unclear at what point the combination will be enough.
Canadian Real Estate Price Growth Still In Negative Territory, But Showing Improvements
The 12-month change in the benchmark price of a home across Canada.
Source: CREA; Better Dwelling.
As mentioned, prices are still coming down, though the size of those drops is smaller. Annual growth at 3.3% in September is an improvement from August (-3.9%), but that has more to do with the size of the decline. From August to September, prices fell in both 2023 and 2024. However, it fell much more sharply last year and left smaller declines. This indicates that downward pressure is easing, but don’t confuse it with rising prices. The benchmark is still moving lower, just not as sharply.
Canadian Real Estate Prices Have Dropped 16% Since Peak
The drop is clearer when compared to the record high. Since peaking in March 2022, the benchmark price dropped 16.3% (-$138,800) by September 2024. A peak buyer would have seen losses increase by 3.4% last month. Year-to-date gains still haven’t rolled back, but home prices are still decreasing.
Canadian home prices are still falling, but the ice cold market is starting to thaw. Buyers are expected to return as prices and mortgage rates continue to decline—especially investors, as the government hopes. Smaller price drops last month were a strong sign of market improvements. However, a single month isn’t enough to declare this the point of recovery. Especially since this is the third time the declines eased as prices fell, only to get rejected as prices climbed slightly higher.
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