Pace of real estate slump quickens; sales and average prices down from last year

Canada's housing market continued its slowdown last month, with the average selling price of a home touching $665,850 — a decline of almost 20 per cent since February.

The Canadian Real Estate Association (CREA), which represents more than 100,000 brokers, agents and salespeople across the country, said Friday that the volume of home sales fell by 5.6 per cent during the month, and is down by almost one-quarter compared to last year.

"Activity continues to slow in the face of rising interest rates and uncertainty," CREA chair Jill Oudil said in a statement.

After rising at a rapid pace for much of the pandemic, higher interest rates slammed the brakes on Canada's housing market this spring.

Average selling prices have declined every month since February 2022, and are down by 1.8 per cent compared to what they were a year ago.

"What goes up must come down, and the Canadian housing market continued to cool in June under the weight of higher interest rates," TD Bank economist Ksenia Bushmeneva said.

Ontario led the way down, as selling prices in suburban markets that rose the most during the pandemic are coming back down to earth now.

"Sales and prices are down disproportionately more in Ontario and B.C., which suffered severe affordability deteriorations during the pandemic," Bushmeneva said. "We expect that home prices and sales will move even lower amid further pressure from borrowing costs."