Weak demand for Canadian real estate continues to push prices lower. Canadian Real Estate Association (CREA) data shows the price of a composite benchmark (typical) home made a sharp downtick in April. The medium-term trend also reveals this is a more complicated issue than just trade war jitters. Over the past few years, buyers have been rejecting price increases at lower and lower levels, indicating more downward pressures are forming.
Canadian Real Estate Prices Continue To See Downward Pressure
The composite benchmark price of existing home resales made through the MLS.
Source: CREA; Better Dwelling.
Canadian real estate prices slipped further last month. The price of a benchmark (typical) home fell 0.7% (-$4,800) to $701,900 in April. This represents a 3.6% (-$26,100) decline from last year, and it’s clear in the chart above that prices have traded a fairly narrow range in recent months. The price of a typical home in Canada was roughly the same price back in 2021.
Canadian Real Estate Price Growth Turns Further Negative
The annual price growth rate for a benchmark home sold across Canada.
Source: CREA; Better Dwelling.
Growth has been decelerating according to the CREA HPI. The 3.6% contraction last month marked the fourth month of consecutive deceleration for the annual growth rate. This was the sharpest annual change since September 2024, rolling back minor progress made at the end of last year.
Canadian Real Estate Prices “Triple Top,” Buyers Rejecting Growth At Lower Levels
Canadian real estate heading lower may come as a surprise considering how much prices have dropped since peaking in 2022. A typical home is 17.6% (-$149,700) lower than the March 2022 record high. CREA’s HPI has now peaked 3 times since the initial correction from the all-time high, establishing lower highs (peaks) each time. This is called a triple top in asset prices, and shows that buyers rejected price increases faster each time.
Canadian real estate prices slipped further last month, and buyers are more hesitant about price increases despite cheaper financing and more leverage. It’s easy to dismiss this as another casualty of the trade war, but that doesn’t explain a 3-year long trend. There’s very real concerns around affordability and value, the latter being a very under-discussed issue. Many of the country’s most expensive cities have seen considerable corrections, like Toronto. However, it’s not clear if the price drop is enough to make it a deal—these cities used to have low unemployment, and presented unique opportunities. Now they barely resemble their pre-2020 reputations, and struggle to compete with more affordable regions poaching top talent.
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