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(Bloomberg) — Canada home prices slipped for the first time since March as higher rates weighed on the market and slowed sales.
The benchmark home price dropped 0.3% in September from the previous month to C$753,900 ($551,590), according to data released Friday by the Canadian Real Estate Association. A slowdown in Ontario drove the declines, the group said.
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The number of homes trading hands in the country also dropped, falling 1.9% in September from August, according to seasonally adjusted data.
The CREA lowered its forecast for home sales and average prices over the rest of 2023 and into 2024 given the prospect of “higher for longer” interest rates. The Bank of Canada kept a benchmark interest rate steady in September at its highest level in 22 years. Policymakers — set to meet later this month — are weighing strong economic data including wage growth and employment gains.
“Resale housing markets have settled down pretty quickly following this spring’s brief and somewhat surprising rebound in sales and prices,” Shaun Cathcart, the real estate board’s senior economist, said in a statement. “Expect a quieter than normal winter with all eyes on the Bank of Canada. We’ll see how buyers are feeling when the snow starts to melt.”
The number of homes being put on the market rose 6.3% in September, bringing new listings closer to their average levels. Even so, buyers continue to face a shortage of choices. It would take 3.7 months to work through all the current listings at the current rate of sales, compared with the long-term average of about five months, the board’s data show.
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