Unsurprisingly, soaring interest rates are keeping the temperature significantly down for Canada\u2019s housing markets this fall. Activity remains well below pre-pandemic levels in most markets and prices are softening further from peaks reached earlier this year. There were some interesting nuances emerging from the latest local real estate board reports though. The slide in activity may be stabilizing in Toronto (and perhaps Calgary and Edmonton) whereas it was still full-on in Montreal (and Ottawa to a lesser extent) as of October. We\u2019re not convinced a sales uptick last month in Vancouver marked a turning point but it could signal a slowing in the pace of correction. Declining price trends appear to be broadly moderating with all major markets reporting smaller rate of depreciation in October. <\/p>\n
Whether activity is stabilizing, will soon stabilize or slump further, our view is the market will stay generally soft over the coming months. The massive interest rate increases to date and a further 25 basis-point hike expected from the Bank of Canada by year-end will continue to significantly challenge buyers. Poor affordability poses a huge obstacle in many markets that only lower prices can ease in a meaningful way. We expect prices will keep falling until a bottom next spring. Our forecast calls for the national benchmark price to drop 14% from (quarterly) peak to trough. <\/p>\n