Something darkly humorous about these central-bank engineered easy-money spikes that then go POOF.
By Wolf Richter for WOLF STREET.
Home prices in Canada dropped 1.7% in November from October, after having dropped by 1.6% in October from September, the fifth month in a row of month-to-month declines, according to the Home Price Benchmark Index for single family houses by the Canadian Real Estate Association (CREA) today. These drops whittled down the year-over-year gain to just 0.9%.
Since peak-frenzy in March 2022, the benchmark price has fallen by 17.2%, or by $162,000 (all prices in Canadian dollars), to $788,200 – a level first reached on the way up in September 2021.
Substantial losses spread across other markets, but not all: Prices in Calgary rose to a new record. We’ll get to them in a moment.
Home sales dipped by 0.9% seasonally adjusted in November from the already low levels in October, the fourth month in a row of declines – prices are still too damn high – and supply of homes for sale inched up to 4.2 months at the current pace of sales, compared to 3.1 months in May.
The easy money is over, the Bank of Canada hiked its overnight rate to 5.0% in July and has kept them there. Home prices reached such a level of craziness that they were regularly pointed to by the BoC in its pronouncements for the past two years.
And now, the BoC has to grapple with another housing issue, the worst rent inflation since 1983.
Single-family House Prices by Market.
Greater Toronto Area (GTA): The MLS Home Price Benchmark Index for single-family houses fell by 2.0% in November from October, after the 2.1% drop in October from September, to $1.291 million, the fifth month in a row of declines. The November drop whittled down the year-over-year gain to 1.3%.
The benchmark price has plunged by 18.9%, or by $300,000, since the peak in February 2022 and is now back where it had first been in September 2021 on the way up.
There is something darkly humorous about these central-bank engineered easy-money spikes that then go POOF.
In the Hamilton-Burlington metro (part of the “Greater Toronto and Hamilton Area”), the single-family benchmark price fell by 3.0% in November from October, to $864,200.
From peak in February 2022: -25.4%, or -$294,700
Year-over-year: -2.2%.
Greater Vancouver: The benchmark price for single-family houses fell 0.8% for the month, to $1.985 million:
From peak in April 2022: -5.6% or -$117,400
Year-over-year: +6.7%
Victoria: The single-family benchmark price fell 1.2% for the month to $1.148 million:
From peak in April 2022: -11.3% or -$146,700
Year-over-year: +2.5%
Ottawa: The benchmark price of single-family houses fell by 1.8% for the month, to $708,900, where they’d first been in March 2021:
From peak in March 2022: -13.9% or -$114,300
Year-over-year: +1.6%.
Funny head-and-shoulders chart of a housing market had been relatively sane until the BoC went on its money-printing binge and 0% in March 2020.
Calgary: The single-family benchmark price rose 0.4% to a record of $638,600, and was up by 12.1% year-over-year, a spike after years of going nowhere.
Montreal: The single-family benchmark price ticked up by 0.3%% for the month, to $604,200:
From peak in May 2022: -6.7% or -$43,400
Year-over-year: +4.7%
Halifax-Dartmouth: The single-family benchmark price plunged by 3.9% for the month, to $517,100:
From peak in April 2022: -10.8% or -$62,400
Year-over-year: +4.8%.
Quebec City Area: The single-family benchmark price dropped by 1.9% from the record in October, to $389,600, and was up by 6.3% year-over-year:
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