Demand-supply conditions have decelerated for several months in a row, RBC says
The downturn in the Canadian housing market still has some way to go before settling, according to RBC Economics.
“September data gave few indications the bottom is near,” RBC said in a new analysis. “Both activity and prices continued to trend lower in the vast majority of local markets. Demand-supply conditions generally eased some more.”
Housing markets should also brace for “more of the same” slowing in the near future considering that the Bank of Canada is likely to hike its rates even more in the coming months, RBC said.
Canada saw its seventh straight month of declines in home sales with a 3.9% drop in September, pulling national activity down by 36% from February levels.
The worst declines since February were seen in British Columbia (down by 47%), Ontario (down by 41%), and Alberta (also down by 41%), RBC reported.
“Activity is now below pre-pandemic levels in all provinces except Alberta, Saskatchewan, and Newfoundland and Labrador,” RBC added. “Home resales in Canada (at 419,900 units on a seasonally adjusted and annualized basis) are the softest in a decade and likely to stay that way for a while longer.”
However, some silver linings are apparent.
“Activity in Ontario and British Columbia may be closer to stabilizing (though not so much for prices due to persisting affordability issues),” RBC said.