Canada’s housing market continues to feel the effect of rising interest rates as Canada’s average home price remains 10% lower year-over-year. Nationally, sales during the month of October 2022 were down 36% year-over-year to 33,698 transactions.

Over this past year, factors that have spooked Canadian home buyers have been rapidly rising Canadian mortgage rates, brought about by Bank of Canada rate hikes. The effect of this can be seen in prime rates, which have soared from 2.45% at the start of 2022 to 5.95% as of November 2022. While Canada’s inflation rate has cooled off in recent months, current elevated levels of inflation in Canadacontinue to put pressure on policymakers to increase interest rates.

Compared to February 2022's peak of $816,720, the average sold price in Canada is now 21% off from that record-breaking month. This means that the average home price in Canada has now fallen by 21%, or close to $172,000, in the span of seven months. This has occurred at the same time as the Bank of Canada’s rate hikes, which started in March 2022.

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