Homebuyers remain determined while sellers step back in response to additional interest rate hikes

According to the Royal LePage House Price Survey, the aggregate¹ price of a home in Canada decreased modestly by 0.7 per cent year-over-year to $809,200 in the second quarter of 2023, indicating that nationally, the real estate market is close to the point where it will have recovered fully from 2022’s post-pandemic market correction. On a quarter-over-quarter basis, the aggregate price of a home in Canada rose 4.0 per cent in Q2. This was the second consecutive quarter to show positive growth following a rapid decline in prices over the last year as a result of the Bank of Canada’s aggressive interest rate hike campaign, which began in March of 2022.

“The Bank of Canada remains determined to bring inflation down to its target of less than three per cent. This has proven to be especially challenging at a time when the job market is so strong and Canadians continue to spend, partly due to a build-up of savings during the pandemic,” said Phil Soper, president and CEO of Royal LePage. “The Canadian real estate market has been in a steady state of recovery since the start of the year. While these additional interest rate hikes, and those potentially to come, will likely put a damper on activity and sales volumes, demand for housing remains very strong. We expect the rate of appreciation to moderate through the second half of 2023, causing home prices to level off or increase marginally.”

The Royal LePage National House Price Composite is compiled from proprietary property data nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home declined 2.0 per cent year-over- year to $841,900, while the median price of a condominium remained essentially flat, decreasing by just 0.4 per cent year-over-year to $586,900. On a quarter-over-quarter basis, the median price of a home in these property segments rose 4.1 and 2.7 per cent, respectively. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.

Royal LePage is forecasting that the aggregate price of a home in Canada will increase 8.5 per cent in the fourth quarter of 2023, compared to the same quarter last year. The previous forecast has been revised upward to reflect strong activity and price appreciation in the first half of the year.

_{¹ Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions and includes both resale and new build.}