A detailed new real estate report put out by Desjardins says the housing correction has started and areas like Niagara Region that are a couple hours out of the GTA will likely see the biggest price drops.
Slowing home sales and falling prices in cities across Canada have homeowners and prospective buyers alike wondering how low valuations could get as interest rates rise and the post-pandemic market starts to materialize.
But just how low prices will go depends on what part of the country you’re living in, the report from Desjardins Economic Studies suggests saying cities that saw the most growth in the pandemic now have the furthest to fall. (see graph in report below)
Net interprovincial migration became a key driver of housing market activity in provinces such as New Brunswick and Nova Scotia. According to Statistics Canada, the Maritime provinces saw the fastest pace of inward migration from other parts of Canada in at least the past 20 years. This led to the largest provincial gains in average home price in Canada during the pandemic, ranging from 60% to 70% at their pandemic peak relative to December 2019.
Although the report concludes that a correction is on the go, it anticipates that it will continue to be concentrated in a small number of markets. But there’s no need to panic. While a correction in the range of 10% to 20% is likely by the end of next year in most provinces, average home prices are expected to remain above the pre‑COVID level and trend. As such, the anticipated correction should bring more balance to the Canadian housing market. TO READ THE FULL REPORT GO HERE.