Sales also slumped to their lowest level since 2012
The average Canadian home sold in December cost $472,000, a figure that declined by almost five per cent in 2018.
The Canadian Real Estate Association also said Tuesday that the number of homes sold was down, too, to the lowest annual pace since 2012.
December is not typically a busy year for home sales, but this year’s look even worse when compared to the same month in 2017, because at the time, new rules for stress testing mortgages were about to be implemented, and buyers were rushing to buy before they came into force in January 2018.
Sales were down by 19 per cent in December compared to the same month a year earlier.
“Trends were pushed higher in December 2017 by homebuyers rushing to purchase before the new federal mortgage stress test took effect at the beginning of 2018,” CREA president Barb Sukkau said. “Since then, the stress test has weighed on sales to varying degrees in all Canadian housing markets and it will continue to do so this year.”
Toronto-Dominion Bank economist Rishi Sondhi said the numbers show the housing market has clearly “lost some steam” in the second half of last year.
“The broad-based nature of the decline suggests that rising interest rates and a tighter lending environment are impacting markets across the country,” he said. For 2019, he projects “the level of sales will remain relatively low compared to recent years.”
Real estate prices in Toronto and Vancouver are consistently and significantly higher than they are just about anywhere else in Canada, so those two cities skew the national average higher. Stripping the two out of the equation, the average Canadian home was worth just over $375,000 last month.