Canadian housing prices have fallen with rising interest rates, but they remain on a long-term upward trend, according to the annual Price Per Square Foot (PPSF) Survey conducted by Century 21 Canada. .“We knew that the market had to come down from the highs of the last few years, and we’re now fully seeing the effects of the interest rate growth that started last year,” said Century 21 Canada Executive Vice President Todd Shyiak in a press release..“But we have to look at these numbers within the larger context.” .Shyiak said the fact home prices have not dipped to pre-pandemic levels “shows that homes are still in demand and we continue to see growth in smaller markets as more families seek a lower cost of living.” .Century 21 said the situation is uneven, adding the hottest housing markets of large cities are seeing lower condo prices, but smaller markets are seeing PPSF growth. .Most markets which experienced price declines from last year remained equivalent to their 2021 benchmarks and above previous years. This year’s study offers data going back to 2018 for numerous communities. .Prices reached low points in January and climbed over the spring, but many markets did not manage to regain their 2022 levels..Condos in Vancouver, Toronto, and Montreal saw price declines, but those in small Ontario cities and Atlantic Canada rose. .Century 21 said the steep prices throughout BC seem to have reached their cooling point, with the province seeing its steepest drops, but at levels at or above those from 2021..It added Vancouver boasts some of the most expensive PPSF dwellings in Canada, and prices of those in the surrounding suburbs remain high. .Cities in BC farther from Vancouver such as Chilliwack and Kelowna have seen dips, but prices climbed throughout the spring to remain above 2021 levels..The only BC region to see major growth was Victoria, indicating more Lower Mainlanders are searching across the water for cheaper real estate..Century 21 said Alberta has seen the most growth over the past year, with consistent PPSF gains in most markets. It said Edmonton condos were among those to decline — a potential sign of younger and newer buyers being affected by rising interest rates. .Condo prices in Okotoks, AB, rose 14% — an indication small towns have the potential to grow faster as buyers explore new options..Calgary saw a rise of 5.8% in single-family home prices and 9.8% in condos, but Red Deer was unchanged. .Century 21 Bamber Realty Owner George Bamber called Alberta “a viable option for a lot of buyers who are leaving the more expensive areas of BC.”.“Buyers both young and established are finding homes that fit their needs,” said Bamber. .The Prairies remained steady with no major gains or losses across the board. Saskatoon detached homes led the pack at an average PPSF of $344. .Winnipeg, Brandon, and Regina continue the trend, with single-family homes having a PPSF of $291, $276, and $275, respectively..The most significant decline was in Winnipeg, where single-family homes fell 7.6% in PPSF. .Toronto condos remain expensive at a PPSF of $1,013 — a 16% drop from 2022. However, cities such as Niagara Falls and Cambridge saw their home prices increase by double digit gains, and they lead an overall trend of cities farther away from the Greater Toronto Area seeing growth in the price of single-family homes..Century 21 Heritage Group Owner Eryn Richardson said the trend of families looking for space away from downtown cores continues. .“The changing interest rates definitely had an impact on the prices as buyers are more hesitant, but no single market has fallen dramatically and we’re still seeing a lot of growth,” said Richardson. .Montreal saw a dip in the price of condos and single-family homes, but the decline was modest and in the single digits..Century 21 Immo-Plus Owner Mohamad Al-Hajj said young people love Montreal, which has helped the market remain stable. .“We’ll keep an eye on how the rest of the year goes, but it does look like things will remain steady,” said Al-Hajj. .Prices in Atlantic Canada have continued to rise as Canadians from expensive urban markets seek a lower cost of living. Single-family homes in Fredericton, Moncton, and St. John's saw double digit increases. .Century 21 A and T Countryside Realty Manager Paul Burns said these trends have been happening for years, but post-2020 is when they took off. .“Interest rates may have slowed the market down slightly, but I’m confident New Brunswick especially will continue to grow,” said Burns. .Shyiak said inventory will play a major factor in prices going forward, as sellers might hold off on putting their homes on the market because of a hesitant buyer base..While he does not know what the next six months hold for Canada’s housing prices, he said it is important not to focus too much on a single year and look at each data point within the larger context. .“That’s why this survey becomes more valuable year-over-year, because it allows us to see the big picture of Canadian housing,” he said..Bank of Canada (BOC) Governor Tiff Macklem said on July 13 interest rates will remain high until 2024 — the highest in 22 years. .READ MORE: Surging food costs surprised Bank of Canada, interest rate hits 5%.Macklem said high grocery prices have surprised him. The BOC raised its key rate on interbank loans by 25 points to 5%. .“Inflationary pressures are proving more persistent,” said Macklem..Century 21 franchisees were asked to help come up with the average PPSF in their market. Most used the median price and square footage in their market in sales from January to June.
