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Canada Housing Market: Slower Price Growth

Canada Housing Market: Slower Price Growth

by Laura Forester | October 28, 2021


According to the latest Canada Housing Market report from RPS and Moody’s Analytics, the market is showing signs of slower home value growth.

"With the Bank of Canada now tapering its asset purchases, we expect interest rates to rise and housing price appreciation to slow down considerably through 2022 and into 2023." cites report author, Abhilasha Singh, a Senior Economist at Moody’s Analytics.

Here are a few highlights from the report:

  • The housing market is showing signs of a slowdown. House price appreciation notched its slowest pace in seven months in September. Building permits and housing starts appear to have peaked in March, with the last five months of data showing a noticeable slowdown. Further, prices for raw materials are responding to normalizing demand. The second-quarter GDP report showed a sharp drop-off in commissions and fees related to sales activity. 
  • House price appreciation is slowing and will slow considerably through 2022 and into 2023. With the Bank of Canada now tapering its asset purchases, interest rates are poised to rise. We expect that households will be able to adjust to the increase in debt-service obligations. However, given that Canadians’ high debt loads make them relatively more sensitive to changes in interest rates, house price appreciation is likely to reach a near standstill in late 2022.
  • The Delta variant is a downside risk and may slow the market further. The slightly less optimistic labour market outlook resulting from the variant will have a negative impact on demand, though not enough to significantly derail the market.

Read the full report


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