The Canadian real estate market slowed in March, but buyers are not bargain-hunting.
The Canadian Real Estate Association (CREA) says sales fell 5.4% month-over-month and 16.3% below the all-time high set in March 2021. Sales fell in about half of the markets tracked, led by the Greater Toronto Area. (GTA) and Calgary.
But the pullback from such high levels means that activity remains historically high. CREA says it was the second busiest March on record for sales.
The number of newly listed properties fell 5.5% month over month.
Price growth slowed last month. The MLS Home Price Index (HPI) rose 1% month over month, down from February’s 3% jump. Prices were up 27.1% year over year.
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CREA Senior Economist Shaun Cathcart says price moderation is a good thing given that so many people are worried about another year of soaring prices like 2021.
“A number of measures were announced in the federal budget to help aspiring home buyers, the most significant being the construction of more homes. That’s the obvious long-term solution to this problem, because we all need to live somewhere,” Cathcart said.
“In the short term, the Bank of Canada will do the heavy lifting in the coming months to slow prices. Unfortunately, that will do nothing to improve affordability. Quite the opposite in fact.”
The Bank of Canada raised its key rate by 50 basis points last week and warned of further rate hikes to fight inflation. Its next interest rate announcement is June 1.
Jessy Bains is a Senior Reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.
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