Canada’s housing market is beginning to fall from its spot as the fastest growing market in the world. After years of intense price growth, Canadian real estate prices dropped faster than every other country around the globe.
- Canadian real estate prices fell 3.8% in Q3 2017
- This price decline was Canada’s biggest drop since the early 1990s
- Canada real estate prices were still up 7.4% year-over-year
Canada’s housing market has been going through a tumultuous year as real estate prices reached record levels of unaffordability. The government already began to address unsustainable price growth with new mortgage rules and increased rates.
The Canadian real estate market has been a global leader in price growth for the past decade. In the last six years, Canada skyrocketed to the top of the Real House Price Index (RHPI), conducted by the Federal Reserve Bank of Dallas. The RHPI pulls housing data from a combination of sources, including The Canadian Real Estate Association, Royal LePage, Statistics Canada, and UBC.
Canadian real estate prices posted their largest decline since 1991 in the third quarter of last year, despite consistent and rapid growth in recent years. Prices fell 3.8% in Q3, the first quarterly drop in Canada since 2012.
Many experts fear that the country has created a housing bubble. Economists worldwide have criticized the huge gap between income and home prices in Vancouver and Toronto.
Canada is still beating the US and aggregate data for annual shifts in real estate prices. Real Estate prices were up 7.4% year-over-year in the third quarter of last year, so the market needs more deflation before returning to truly sustainable levels.