Royal LePage is lowering its expectations for home prices in Canada and now says prices in the fourth quarter are expected to be down compared with the same quarter last year, erasing the gains made at the start of 2022.
The real estate brokerage’s house price survey is predicting the aggregate price of a home in Canada in the final three months of the year will be down 0.5 per cent compared with the fourth quarter of 2021.
That’s down from a July forecast that predicted prices in the fourth quarter to be up 5.0 per cent on a year-over-year basis.
The real estate market in Canada has cooled as mortgage interest rates have climbed higher this year.
Royal LePage says the national aggregate home price in the third quarter was up 3.3 per cent year-over-year at $774,900, however it was down 4.9 per cent on a quarter-over-quarter basis.
Royal LePage CEO Phil Soper says home prices follow sales volume trends, which means he expects to see further softening in the final months of the year.
“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,” Soper said in a statement.
“Our revised outlook has national prices at just below where we ended 2021, erasing the gains made in the first quarter of 2022.”