Untold Story – “Canada having hard landing for over a year already”: Royal LePage

Housing Market Had Major Correction, Nobody Noticed: Royal LePage

What if Canada had a housing market correction and no one noticed?

That’s what real estate expert Phil Soper says has played out over the past year: the sharpest decline in home sales since the Great Recession.

“Canada experienced a significant housing market correction over the last four quarters that most in the nation missed entirely,” Soper, president and CEO of Royal LePage, said in the company’s third-quarter report.

“Many regions experienced dramatic slowdowns in the number of homes trading hands, but news of double-digit unit sales declines went largely unnoticed, over-shadowed by a macabre fascination with the prospect of a U.S.-style home price collapse, which of course never transpired.”

Until recently, Toronto and a number of other major markets experienced a sales slump, but little to no decline in prices. The number of homes for sale also dropped during that time as sellers also stepped aside, keeping pricing stable.

“That’s not uncommon for corrections, if you look back over the decades it’s actually really rare to see house prices on a national basis decline,” Soper said.

“What made this past correction particularly interesting and frustrating for people in the industry was there was so much focus on the prospect of a crash in Canadian home prices that all eyes seemed to be focused on that.”

Home price appreciation did fall below the long-term average of five per cent, Soper said, but that doesn’t grab headlines the same way an outright decline would.

The Canadian Real Estate Association (CREA) says some 325,180 homes have changed owners so far this year, about three per cent less than during the same period of 2012.

CREA’s 2013 forecast pegs sales at 449,000, their lowest levels since 2010


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