“We’ve seen that inflation has been more persistent than we originally anticipated and the Bank of Canada is taking more aggressive action, so we’re in the process of revising our forecasts,” said Bowers.
However, she pointed out, today’s price declines must be viewed against the unprecedented price runs ups experienced across Canada over the course of the pandemic. “It’s very important when thinking about this price decrease to think about the rapid, sort of unsustainable, levels of house price increases that occurred during the pandemic,” she said.
Higher mortgage rates are the main culprit behind softening market conditions, slashing purchasing power and considerably cooled homebuying demand. The Canadian Real Estate Association reported in August that sales dropped for the sixth month in a row and that the average home price fell 3.1% year over year to $637,673, standing nearly $180,000 lower than the peak recorded in February.