Canadian Real Estate Prices See Largest Single Month Decline Since 2008

Posted by Ricky Dhadwal on Wednesday, August 16th, 2017 at 6:56am.

Canadian real estate prices made the largest single-month decline in years. The Canadian Real Estate Association (CREA) numbers show that the price of homes are falling across the country. While it’s too early to call it a trend, it’s definitely something worth noting if you’re looking for a home, or you’re in the industry.

Composite Prices Drop 1.52% From Last Month

Prices showed the largest drop in over almost a decade. The July composite benchmark, which is the price of a “typical” home across the country, fell to $607,100. The $9,400 drop last month is a 1.52% decline, the largest single month decline since the 1.66% drop seen in December 2008. This brings prices back to April 2017 levels, which wasn’t all that long ago really. The more important trend to watch is price growth deceleration.

Canadian Real Estate Price Change 
Date1 Month
Jan 2007 0.81
Feb 2007 1.39
Mar 2007 1.49
Apr 2007 1.5
May 2007 1.45
Jun 2007 1.17
Jul 2007 0.75
Aug 2007 0.6
Sep 2007 0.37
Oct 2007 0.2
Nov 2007 0.08
Dec 2007 -0.08
Jan 2008 0.45
Feb 2008 0.96
Mar 2008 0.86
Apr 2008 0.52
May 2008 0.14
Jun 2008 -0.14
Jul 2008 -0.71
Aug 2008 -0.53
Sep 2008 -0.78
Oct 2008 -1.18
Nov 2008 -1.33
Dec 2008 -1.67
Jan 2009 -1.05
Feb 2009 -0.62
Mar 2009 -0.09
Apr 2009 0.57
May 2009 0.92
Jun 2009 0.91
Jul 2009 1.08
Aug 2009 1.12
Sep 2009 1.11
Oct 2009 0.96
Nov 2009 0.81
Dec 2009 0.58
Jan 2010 0.99
Feb 2010 1.36
Mar 2010 1.13
Apr 2010 0.61
May 2010 0.21
Jun 2010 -0.13
Jul 2010 -0.55
Aug 2010 -0.48
Sep 2010 -0.16
Oct 2010 -0.13
Nov 2010 0
Dec 2010 0.08
Jan 2011 0.56
Feb 2011 1.09
Mar 2011 1.1
Apr 2011 0.96
May 2011 0.72
Jun 2011 0.36
Jul 2011 0.25
Aug 2011 0.13
Sep 2011 0
Oct 2011 0.08
Nov 2011 -0.08
Dec 2011 -0.2
Jan 2012 0.28
Feb 2012 0.91
Mar 2012 1.26
Apr 2012 0.92
May 2012 0.64
Jun 2012 0.17
Jul 2012 -0.17
Aug 2012 -0.2
Sep 2012 -0.2
Oct 2012 -0.2
Nov 2012 -0.32
Dec 2012 -0.32
Jan 2013 0
Feb 2013 0.64
Mar 2013 0.96
Apr 2013 0.95
May 2013 0.7
Jun 2013 0.31
Jul 2013 0.12
Aug 2013 0.07
Sep 2013 0.12
Oct 2013 0.31
Nov 2013 0.26
Dec 2013 -0.12
Jan 2014 0.47
Feb 2014 0.94
Mar 2014 1.03
Apr 2014 0.85
May 2014 0.76
Jun 2014 0.61
Jul 2014 0.11
Aug 2014 0
Sep 2014 0.11
Oct 2014 0.41
Nov 2014 0.07
Dec 2014 0.07
Jan 2015 0.22
Feb 2015 0.83
Mar 2015 1.04
Apr 2015 1.03
May 2015 0.89
Jun 2015 0.73
Jul 2015 0.51
Aug 2015 0.21
Sep 2015 0.55
Oct 2015 0.4
Nov 2015 0.48
Dec 2015 0.23
Jan 2016 0.58
Feb 2016 1.64
Mar 2016 1.8
Apr 2016 2.15
May 2016 2.83
Jun 2016 1.7
Jul 2016 1.03
Aug 2016 0.67
Sep 2016 0.48
Oct 2016 0.68
Nov 2016 0.18
Dec 2016 0.2
Jan 2017 1.65
Feb 2017 2
Mar 2017 3.67
Apr 2017 3.1
May 2017 1.2
Jun 2017 -0.03
Jul 2017 -1.52
 

Source: CREA, Better Dwelling.

Sharp Deceleration Of Growth

Canadian real estate prices are still higher than last year, but the rate of growth is tapering fast. The $607,100 composite price in July 2017, is 12.86% higher than the same month last year. Peak growth on the 12 month cycle was observed in April 2017, when prices were 19.7% higher than the same month, one year before. The drop brings us back to May 2016 levels of price growth. While a gain of over 12% is nothing to sneeze at, deceleration of price growth is something you’re going to want to keep an eye on if you’re buying as an investment.

Canadian Real Estate Price Change (12 Month)
Date12 Month
Jan 2007 12.93
Feb 2007 12.54
Mar 2007 12.1
Apr 2007 11.72
May 2007 11.24
Jun 2007 10.75
Jul 2007 10.59
Aug 2007 10.41
Sep 2007 10.1
Oct 2007 10.04
Nov 2007 10.07
Dec 2007 10.14
Jan 2008 9.75
Feb 2008 9.28
Mar 2008 8.61
Apr 2008 7.57
May 2008 6.18
Jun 2008 4.81
Jul 2008 3.29
Aug 2008 2.13
Sep 2008 0.96
Oct 2008 -0.42
Nov 2008 -1.83
Dec 2008 -3.39
Jan 2009 -4.84
Feb 2009 -6.32
Mar 2009 -7.21
Apr 2009 -7.17
May 2009 -6.45
Jun 2009 -5.47
Jul 2009 -3.76
Aug 2009 -2.17
Sep 2009 -0.31
Oct 2009 1.84
Nov 2009 4.05
Dec 2009 6.43
Jan 2010 8.63
Feb 2010 10.79
Mar 2010 12.14
Apr 2010 12.19
May 2010 11.41
Jun 2010 10.26
Jul 2010 8.48
Aug 2010 6.77
Sep 2010 5.43
Oct 2010 4.29
Nov 2010 3.45
Dec 2010 2.94
Jan 2011 2.5
Feb 2011 2.23
Mar 2011 2.2
Apr 2011 2.56
May 2011 3.08
Jun 2011 3.58
Jul 2011 4.43
Aug 2011 5.06
Sep 2011 5.23
Oct 2011 5.45
Nov 2011 5.37
Dec 2011 5.07
Jan 2012 4.78
Feb 2012 4.59
Mar 2012 4.75
Apr 2012 4.71
May 2012 4.62
Jun 2012 4.43
Jul 2012 3.98
Aug 2012 3.65
Sep 2012 3.45
Oct 2012 3.17
Nov 2012 2.92
Dec 2012 2.79
Jan 2013 2.51
Feb 2013 2.23
Mar 2013 1.93
Apr 2013 1.97
May 2013 2.03
Jun 2013 2.17
Jul 2013 2.47
Aug 2013 2.74
Sep 2013 3.06
Oct 2013 3.58
Nov 2013 4.19
Dec 2013 4.4
Jan 2014 4.89
Feb 2014 5.21
Mar 2014 5.28
Apr 2014 5.18
May 2014 5.24
Jun 2014 5.56
Jul 2014 5.55
Aug 2014 5.47
Sep 2014 5.47
Oct 2014 5.57
Nov 2014 5.37
Dec 2014 5.56
Jan 2015 5.3
Feb 2015 5.18
Mar 2015 5.2
Apr 2015 5.38
May 2015 5.52
Jun 2015 5.65
Jul 2015 6.07
Aug 2015 6.3
Sep 2015 6.76
Oct 2015 6.76
Nov 2015 7.2
Dec 2015 7.38
Jan 2016 7.76
Feb 2016 8.63
Mar 2016 9.44
Apr 2016 10.65
May 2016 12.77
Jun 2016 13.86
Jul 2016 14.45
Aug 2016 14.97
Sep 2016 14.89
Oct 2016 15.21
Nov 2016 14.86
Dec 2016 14.83
Jan 2017 16.05
Feb 2017 16.46
Mar 2017 18.6
Apr 2017 19.7
May 2017 17.8
Jun 2017 15.8
Jul 2017 12.86
 

Source: CREA, Better Dwelling.

Is This The Crash?

Nope….at least not yet at least. A crash requires a significant decline in benchmark prices, and we’re only at a 1.5% decline from the all-time high. This a relatively minor drop in contrast to the gains homes made over the past couple of years. However, it is still the largest drop in almost a decade, which is far from normal.

Canadian Real Estate Composite Price
DateComposite
Jan 2007 324,000
Feb 2007 328,500
Mar 2007 333,400
Apr 2007 338,400
May 2007 343,300
Jun 2007 347,300
Jul 2007 349,900
Aug 2007 352,000
Sep 2007 353,300
Oct 2007 354,000
Nov 2007 354,300
Dec 2007 354,000
Jan 2008 355,600
Feb 2008 359,000
Mar 2008 362,100
Apr 2008 364,000
May 2008 364,500
Jun 2008 364,000
Jul 2008 361,400
Aug 2008 359,500
Sep 2008 356,700
Oct 2008 352,500
Nov 2008 347,800
Dec 2008 342,000
Jan 2009 338,400
Feb 2009 336,300
Mar 2009 336,000
Apr 2009 337,900
May 2009 341,000
Jun 2009 344,100
Jul 2009 347,800
Aug 2009 351,700
Sep 2009 355,600
Oct 2009 359,000
Nov 2009 361,900
Dec 2009 364,000
Jan 2010 367,600
Feb 2010 372,600
Mar 2010 376,800
Apr 2010 379,100
May 2010 379,900
Jun 2010 379,400
Jul 2010 377,300
Aug 2010 375,500
Sep 2010 374,900
Oct 2010 374,400
Nov 2010 374,400
Dec 2010 374,700
Jan 2011 376,800
Feb 2011 380,900
Mar 2011 385,100
Apr 2011 388,800
May 2011 391,600
Jun 2011 393,000
Jul 2011 394,000
Aug 2011 394,500
Sep 2011 394,500
Oct 2011 394,800
Nov 2011 394,500
Dec 2011 393,700
Jan 2012 394,800
Feb 2012 398,400
Mar 2012 403,400
Apr 2012 407,100
May 2012 409,700
Jun 2012 410,400
Jul 2012 409,700
Aug 2012 408,900
Sep 2012 408,100
Oct 2012 407,300
Nov 2012 406,000
Dec 2012 404,700
Jan 2013 404,700
Feb 2013 407,300
Mar 2013 411,200
Apr 2013 415,100
May 2013 418,000
Jun 2013 419,300
Jul 2013 419,800
Aug 2013 420,100
Sep 2013 420,600
Oct 2013 421,900
Nov 2013 423,000
Dec 2013 422,500
Jan 2014 424,500
Feb 2014 428,500
Mar 2014 432,900
Apr 2014 436,600
May 2014 439,900
Jun 2014 442,600
Jul 2014 443,100
Aug 2014 443,100
Sep 2014 443,600
Oct 2014 445,400
Nov 2014 445,700
Dec 2014 446,000
Jan 2015 447,000
Feb 2015 450,700
Mar 2015 455,400
Apr 2015 460,100
May 2015 464,200
Jun 2015 467,600
Jul 2015 470,000
Aug 2015 471,000
Sep 2015 473,600
Oct 2015 475,500
Nov 2015 477,800
Dec 2015 478,900
Jan 2016 481,700
Feb 2016 489,600
Mar 2016 498,400
Apr 2016 509,100
May 2016 523,500
Jun 2016 532,400
Jul 2016 537,900
Aug 2016 541,500
Sep 2016 544,100
Oct 2016 547,800
Nov 2016 548,800
Dec 2016 549,900
Jan 2017 559,000
Feb 2017 570,200
Mar 2017 591,100
Apr 2017 609,400
May 2017 616,700
Jun 2017 616,500
Jul 2017 607,100
 

Source: CREA.

This is only the second month in a row where prices have declined, so it’s too early to call it a trend. It’s also pretty unlikely that the largest drop in 103 months would be followed by a gain in my opinion, but I guess stranger things have happened.

Ricky Dhadwal
604.418.6600

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