Canadian Residential Real Estate Outlook

The Housing Market May Have Begun to Cool, but There’s No Need to Panic

The story of Canada’s housing market is well known. In the run-up to the COVID-19 pandemic, Canada posted world-leading price gains. Then lockdowns and remote work sent Canadians to far-flung places looking for more space. This caused prices to increase almost exponentially in communities that had been largely insulated from the rapid escalation in home values in Canada’s largest cities. But as life begins to return to normal and the Bank of Canada tightens monetary policy to bring down decades-high inflation, the Canadian housing market is beginning to roll over. Nationally, this could mean a decline in the average home price of 15% from its February 2022 peak by December 2023. And the adjustment is likely to be most acute in those provinces and communities that experienced the fastest rise in prices during the pandemic. That said, we don’t expect home prices to fall to their pre-pandemic level or trend in any province before the end of 2023, with average home values remaining as much as 25% above their December 2019 mark at the end of next year.