According to Teranet-National Bank Composite House Price Index, house prices rose by 1.4% in June (May: +2.3%). The figure for June was the worst value since January. On an annualized basis, house prices rose 16.7% in June, lower than the 18.3% increase seen in May and also the worst result since January. Data from the Canadian Real Estate Association (CREA) was even more pessimistic, pointing to a monthly drop in home prices and sales in June. Higher interest rates and inflation, as well as affordability concerns, have recently weighed on house prices.
However, housing completions are still solid, with 273,841 seasonally adjusted annualized (SAAR) units completed in June, down 3% from May but higher than the first quarter average. This bodes well for housing investment in the second quarter. However, housing starts are forecast to fall this year as the broader economy slows amid tighter financial conditions.
FocusEconomics Consensus Forecast participants expect 250,000 housing units to be commissioned in 2022 and 218,000 units in 2023.