Home Prices Continue to Dip As Inventory Increases
It’s been nearly a year and a half since the global pandemic set the Canadian housing market on fire, and buyers are finally seeing a light at the end of the tunnel as prices continue to dip.
While home prices are still 26% higher compared to one year ago – the average national home price is $679,051 – overall, the average home price has gone down by 1.3% since May, and 5.3% since March. For comparison, the average home price was $716,828 in March 2021.
In Ontario, the average home price is $857,754. In Ottawa, the average price is $671,400.
Across Canada, home sales have also dropped by 8.4% since May, as prospective buyers experience “buyers fatigue” due to the intense competition brought on by low inventory, bidding wars, and rising house prices during the COVID-19 pandemic.
Meanwhile, inventory is also increasing, with the the number of newly listed properties expanding by 0.7% between May and June.
While this is good news for first-time buyers who have struggled to enter the housing market this past year, CREA warns that there are still supply shortages in many parts of Canada.
“While the frenzy and emotion of earlier in the pandemic seem to have dissipated for now, the key ingredients of a seller’s market are all still in place,” said CREA’s senior economist Shaun Cathcart, “It’s a long road to get back to normal, and for many housing markets, the main issue is that supply shortages are as acute as ever.”