Housing market update: September 2023

The slight recovery in home prices measured in June continued in July, but tight supply-demand conditions persisted and some local markets are performing better than others. Meanwhile, rents roared ahead amid a perfect storm of demand.

• The Canadian Real Estate Association’s (CREA) monthly Multiple Listing Service Home Price Index showed a 1.1% month-over-month rise in July, bringing the average national home price to $668,754. Prices were down 1.5% year-over-year.

• CREA also reports a small 0.7% dip in seasonally adjusted month-over-month home sales in July. More than half of all local markets had an increase in sales in July – including Calgary, Montreal and Edmonton – but the Greater Toronto Area registered a loss, which slightly depressed the overall national figure.

• The Canada Mortgage and Housing Corporation reports that annual housing starts fell 10% to 254,966 from June to July, but that still puts it 7.4% over the five-year average.

• According to Rentals.ca, the average national asking rent jumped another 1.8% from June to July, reaching a new record high of $2,078. That is an 8.9% increase year over year, and 21% higher than in July 2021.

• Three major events this summer contributed to the upward pressure on rents: post-secondary students rushed to secure housing before the fall term, the population reached a record high of 40 million, and more prospective homeowners backed away from buying as the Bank of Canada hiked interest rates to a 22-year high.
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• Since immigrants tend to settle in large urban centres like Toronto and Vancouver, savvy renters and homebuyers are being priced out of these expensive cities and are instead relocating to more affordable places, as seen in contrasting home sale rates in Toronto and Calgary.

• This population exchange will cause rental prices to rise in Canada’s more affordable cities: the average one-bedroom rent in Calgary was still 33% lower than Toronto in July, but rose 17% year-over-year, according to Rentals.ca.

More housing market headlines

Why are young Canadians moving from Ontario to Alberta? – PayProp‍

Housing market faces 'bumpy' road amid high interest rates, RBC says – The Financial Post

'No silver bullet': economists recommend targeted, coordinated policies to solve Canada's housing crisis – Storeys