Royal LePage’s Q4 2022 Home Price Update and Market Forecast
Canada ends 2022 with modest decline in national aggregate home price; prices remain well above pre-pandemic levels
National aggregate home price posts single-digit year-over-year decline in Q4 over 2021; double-digit growth compared to 2020 and 2019
Fourth quarter highlights:
- National aggregate home price down 2.8% in Q4 2022 vs. the prior year; first year-over-year decline recorded in more than a decade
- Prices remain above pre-pandemic levels: Canada’s Q4 2022 national aggregate home price has appreciated 13.8% vs. Q4 2020, and 17.2% vs. Q4 2019
- Greater regions of Toronto and Vancouver record year-over-year aggregate price declines of 4.6% and 3.5% respectively in Q4 2022, while the Greater Montreal Area posts a gain of 2.2% in the same period
- Less than 1% of all homes in Canada were purchased during the peak price period of February and March, 2022
According to the Royal LePage House Price Survey released today, the aggregate price of a home in Canada decreased 2.8 per cent year-over-year to $757,100 in the fourth quarter of 2022; the first year-over-year decline recorded since the end of 2008 during the global financial crisis. On a quarter-over-quarter basis, the aggregate price of a home in Canada decreased 2.3 per cent. This is the third consecutive quarterly decline, and the smallest decrease so far.
“Canada’s housing market closed out 2022 much as expected,” said Phil Soper, president and CEO of Royal LePage. “Activity levels were down sharply compared to the hypercharged state we experienced during the pandemic, with home prices flattening or showing modest declines. While the red-hot market conditions are behind us, there remains a widespread shortage of homes in Canada that cannot be offset by temporarily cooling demand. Many sidelined buyers are waiting patiently for the bottom to be revealed. Once interest rates stabilize and consumers adapt to their new normal, many of today’s sidelined buyers will be back – sooner than many analysts are predicting.”
The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home declined 3.7 per cent year-over-year to $781,900, while the median price of a condominium increased 1.4 per cent year-over-year to $561,600. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.
Prices peaked in the first quarter of 2022 in most, but not all, provinces and within provinces, at different times in different regions and neighbourhoods. In addition, the price of condominiums peaked much later in the year than detached homes. Royal LePage feels quarterly comparisons by market are a fairer and more accurate representation of the change in housing values.
That said, by mid-2022, it had become common for market watchers to reference ‘declines from the peak price’ as a means of supporting the narrative that home prices were crashing. Less than 113,000 resale transactions took place in the months of February and March, when the highest national benchmark prices were recorded, representing a mere 0.68 per cent of all residential dwellings in the country.
“It may be headline-grabbing to say that prices are down by double digits, yet well less than one per cent of property owners completed their purchases in February or March of last year, when the pandemic-driven urgency to buy and serious housing supply shortages came together to create a final spike in prices,” said Soper. “Over time, Canadian homeowners have benefited greatly from real estate appreciation.”
Royal LePage 2023 Market Survey Forecast Table – royal_lepage_national_house_price_composite_in_the_fourth_quarter_2022