The Canadian housing market is experiencing a significant correction, with prices falling across the country for the fifth consecutive month. However, amidst this widespread decline, one city stands out: Calgary. While other major markets grapple with falling prices and affordability concerns, Calgary's housing market continues to defy the trend, reaching new record highs.
National Market Downturn:
1️⃣ Overall Decline: In November, home prices across Canada took a hit, dropping by 1.7% as reported by the Canadian Real Estate Association (CREA). Since March 2022, there's been a significant 17.2% decrease in the national benchmark price.
Source: Canadian Real Estate Association (CREA)
2️⃣ Yearly Slowdown: The once-thriving market now shows a modest year-over-year gain of only 0.9%, signaling a stark change in the market's fortune.
3️⃣ City Setbacks: Big cities like Toronto, Vancouver, Ottawa, Montreal, and Halifax are all feeling the pinch, experiencing drops in prices. This widespread correction underscores the challenges faced across various regions.
Calgary's Defiance:
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Record-breaking prices: In stark contrast to the national trend, Calgary's housing market has bucked the downward spiral, setting new record highs in November.
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Factors contributing to Calgary's strength: A diversified economy, job growth in key sectors like energy and technology, and relatively lower housing costs compared to other major cities are believed to be driving Calgary's resilience.
Impact of Central Bank Policies:
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Rising interest rates: The Bank of Canada's aggressive rate hikes, aimed at curbing inflation, have significantly impacted affordability and contributed to the housing market slowdown.
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Declining home sales: With the cost of borrowing rising, home sales across Canada dipped by 0.9% in November, indicating a weakening demand.
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Soaring rents: The affordability crisis is further exacerbated by rent inflation, which has reached its highest level since 1983, putting immense pressure on renters.
Social Implications:
- Living cost concerns: The housing market turmoil has intensified concerns about the rising cost of living and its impact on social dynamics in Canadian cities.
- Immigration and housing: The government's ambitious immigration target of 1 million newcomers per year adds further pressure to the already strained housing market.
- Negative sentiment: The affordability crisis is eroding the perceived high quality of life in Canadian cities, breeding discontent among residents.
Looking Ahead:
The future trajectory of the Canadian housing market remains uncertain. While Calgary's exceptional performance offers a glimmer of hope, the national market is likely to face continued price adjustments in the near term. The Bank of Canada's future rate decisions and the evolving economic landscape will play a crucial role in determining the pace and duration of the correction.
Sources:
Canadian Real Estate Association: https://www.crea.ca/housing-market-stats/canadian-housing-market-stats/
Bank of Canada: https://www.bank-banque-canada.ca/
Statistics Canada: https://www.statcan.gc.ca/en/start/
BNN Breaking: https://bnnbreaking.com/world/canada/canadian-housing-market-continues-to-decline-calgary-defies-trend/
Disclaimer: The content above is a compilation from diverse reliable online sources, including blogs and news articles. The Dolphy content team does not ensure the factual accuracy of the information. The provided information may be outdated, and it should not be considered as advice or a recommendation. It is advisable to consult with a licensed real estate agent or broker for accurate advice and recommendations.
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