From 2000 to 2022, Canadian home prices rose 375% (an average of 17% per year, shown below in red), while the average Canadian wage (black line below) rose 3% per year .
In the Greater Toronto and Vancouver areas, where most of the living population, average house prices rose 450% and 490% respectively.
The craze escalated during the pandemic, when prices in popular areas jumped 50% between the end of 2019 and February 2022, when the national average sales price reached $816,000.
In October, the average sales price was $656,000, down nearly 20% from the peak. Where I live, north of Toronto, the “new price” discounts are evident and properties are still sitting low.
The problem is that there is a huge supply of homes where owners and lenders are paying market values above $1 million, more than 50% higher than the average October sale. the price.
With buyers in hibernation, many owner/lenders are returning hopes for a stronger spring market (CREA). But with mortgage rates unlikely to be significantly lower until then, prices will have to give.
Disclosure: No position
Editor’s note: The bullet points for this article were selected by Alpha’s research editors.