Even as demand for housing falls, prices continue to increase. Housing sales have fallen 25% since the beginning of the year, as more houses come into the market and the competition among buyers decreases. Despite the lack of demand, housing prices were up 13.6% in June from a year ago, according to the Teranet—National Bank composite house price index. On a month-over-month basis, June prices were up 1.5% since the previous month, the largest increase since August of 2009. Part of the reason for the escalation in housing prices was due to the buying rush that occurred in advance of the implementation of HST on July 1. The average Canadian home price now sits at $342 662, a 4.9% increase from the 2009 average price of $326 689.
Experts agree that the housing market my soon experience a deceleration in price growth, if not outright price drops, thus becoming a buyer’s market. This notion is strengthened by the recent trend among major Canadian banks to lower their interest rates in order to attract new home buyers into the market. The most recent change in interest rates occurred at the end of last week, when RBC, CIBC and BMO dropped their rates by 0.1%.
To view the most accurate and up-to-date Canadian mortgage rates, visit RateHub.ca’s Best Mortgage Rates page. Use our mortgage calculator to view the effects of the recent interest rate cuts on your mortgage payments.