Canada: April house prices decline by 11%

The average Canadian home price reached $495,000 in April, a decline of 11.3% over the past 12 months, according to recent figures from the Canadian Real Estate Association (CREA). While April is typically a busy month for home sales, new listings dropped 4.9% from March’s level, marking the slowest April in nine years.

Sales also plummeted by 13.9% compared to the previous year, the lowest monthly level in seven years, with 60% of all markets experiencing reduced sales.

The new stress test rules aimed at tightening lending standards, along with new taxes on foreign buyers in Ontario and British Columbia, are cited as primary factors impacting activity and sentiment across the country. CREA President, Barb Sukkau, commented in a release, "The stress test that came into effect this year for homebuyers with more than a twenty percent down payment continued to cast its shadow over sales activity in April".

According to RFi Group data, 40% of Canadians are expecting to borrow less in the next 12 months, compared to just 4% looking to borrow more. However, TD Bank economist Rishi Sondhi added: "ultimately, signs of stabilization should emerge later in the year and into 2019, amid healthy labour markets and ongoing population growth."

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