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Special Report

Canada Housing Research Brief

November 2022

Canada’s Housing Market May Be Entering a New
Stage of its Cyclical Downturn

Housing market slowdown beginning to moderate. Home prices are down roughly 10 per cent from the peak witnessed in February, and the year-over-year change in prices turned negative for the first time in three years in October, declining by 1.9 per cent. Nonetheless, the 1.4 per cent month-over-month drop in housing prices during the most recent period was the smallest since March, creating a more optimistic outlook. Furthermore, existing home sales were up 1.3 per cent monthly in October, the first increase since interest rates began to rise, potentially suggesting that buyers and sellers are coming to terms with the new environment of elevated borrowing costs and slightly lower prices. While Canada’s housing market is starting to show signs of an impending inflection point, elevated interest rates will likely keep market activity muted into early 2023. Price corrections, however, could be entering a more moderate period, suggesting Canada’s housing market may begin to stabilize sooner than expected.

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