Canada’s Real Estate Market Just Took a Hit For the First Time Since 2013

The Background 

For the first time since 2013, the Canadian real estate market is in a state of decline. Not only did the average selling price of a Canadian home fall 0.3% in the last year to $478,696 (still crazy but we won’t go there right now), but the Canadian Real Estate Association also reported 12% fewer sales in July 2017 than in the same month last year. The drop is really due to the housing markets in Toronto and Vancouver, which have both faced some hurdles since the government intervened and implemented some new policies. Without those two major cities, the average national selling price would be $381,297, which is actually a 5% increase over 2016. CBC

Why You Should Care

While this may sound like good news for buyers, real estate experts don’t expect this trend to last. The CREA admits that the governmental policies have hit certain areas hard, but that they’re already started to see signs that the impact is starting to wane. According to the realtor group’s chief economist, Gregory Klump, “this suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that’s indeed the case.” Derek Holt, an economist at Scotiabank also agreed with Klump’s sentiments, saying that it appears the decline in sales is slowing. If what happened in Vancouver is any indication, the Toronto housing market will recover from this setback and then continue to rise (bringing the average selling price with it).

What’s Next?

Buyers and sellers will have to sit tight until the CREA releases its August report…but for now, if you’re a buyer who’s not selling, might be a good time to strike.