Home prices to turn negative for year after 4.9% Q3 fall: Royal LePage

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Canadian home prices decreased by 4.9 per cent on a quarterly basis in the third quarter and are now expected to end the year below 2021 levels, according to the latest Royal LePage House Price Survey released Thursday.

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While aggregate home prices rose 3.3 per cent year over year, the pace of growth was significantly slower than the 21.4 per cent hike reported in the third quarter of 2021. The quarter-over-quarter decline was the second consecutive such drop, and pushed home prices down to $774,900 from $815,000 in the second quarter.

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Royal LePage’s forecast for the fourth quarter, meanwhile, was revised down. If the trends persist, the national aggregate home price is expected to decline by 0.5 per cent on a year-over-year basis in the fourth quarter. The previous prediction, made in the second quarter of this year, was for a national aggregate home price increase of five per cent.

“September did not bring the typical seasonal lift in the number of homes trading hands in this country, a clear indication that our housing market continues to adjust to higher borrowing costs,” said Phil Soper, chief executive of Royal LePage.

“Home prices follow sales volume trends, which means we will see further softening in the final months of the year. Our revised outlook has national prices at just below where we ended 2021, erasing the gains made in the first quarter of 2022.”

• Email: shcampbell@postmedia.com