Canada Ends 2022 With Modest Decline In National Aggregate Home Price


According to the Royal LePage House Price Survey released today, the aggregate price of a home in Canada decreased 2.8 per cent year-over-year to $757,100 in the fourth quarter of 2022; the first year-over-year decline recorded since the end of 2008 during the global financial crisis. On a quarter-over-quarter basis, the aggregate price of a home in Canada decreased 2.3 per cent. This is the third consecutive quarterly decline, and the smallest decrease so far.

Canada’s housing market closed out 2022 much as expected,” said Phil Soper, president and CEO of Royal LePage. “Activity levels were down sharply compared to the hypercharged state we experienced during the pandemic, with home prices flattening or showing modest declines. While the red-hot market conditions are behind us, there remains a widespread shortage of homes in Canada that cannot be offset by temporarily cooling demand. Many sidelined buyers are waiting patiently for the bottom to be revealed. Once interest rates stabilize and consumers adapt to their new normal, many of today’s sidelined buyers will be back – sooner than many analysts are predicting.”

The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home declined 3.7 per cent year-over-year to $781,900, while the median price of a condominium increased 1.4 per cent year-over-year to $561,600. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.

Peak Price

Prices peaked in the first quarter of 2022 in most, but not all, provinces and within provinces, at different times in different regions and neighbourhoods. In addition, the price of condominiums peaked much later in the year than detached homes. Royal LePage feels quarterly comparisons by market are a fairer and more accurate representation of the change in housing values.

That said, by mid-2022, it had become common for market watchers to reference ‘declines from the peak price’ as a means of supporting the narrative that home prices were crashing. Less than 113,000 resale transactions took place in the months of February and March, when the highest national benchmark prices were recorded, representing a mere 0.68 per cent of all residential dwellings in the country.

“It may be headline-grabbing to say that prices are down by double digits, yet well less than one per cent of property owners completed their purchases in February or March of last year, when the pandemic-driven urgency to buy and serious housing supply shortages came together to create a final spike in prices,” said Soper. “Over time, Canadian homeowners have benefited greatly from real estate appreciation.”

While home prices were down modestly on a year-over-year basis in the final quarter of 2022, it is prudent to note that prices in the fourth quarter of 2021 were close to their peak, and home prices across the country remain well above pre-pandemic levels. In the fourth quarter of 2022, the aggregate price of a home in Canada recorded an increase of 13.8 per cent over the same period in 2020, and 17.2 per cent over the same period in 2019.

Several important factors will continue to support home prices in Canada, including high levels of employment, strong household savings, and growing household formation, both organically from our millennial and older generation-z cohorts, and through record immigration rates.

“While demand has slowed in this rising interest rate environment, we know that many families waiting on the sidelines have the capacity to buy and have chosen not to, waiting for conditions to stabilize. Soon enough, these buyers will return to the market and will be met, once again, with the realities of low inventory and much competition,” noted Soper. “While we do not expect the same level of frenzied demand seen at the height of the pandemic, new household formation created by millennials and older gen-Zers, as well as hundreds of thousands of newcomers, will put price pressure on our limited supply of available homes.”

Last week, the government of Canada confirmed that it met its 2022 immigration target of more than 431,000 new permanent residents, the largest number of people ever welcomed in a single year in our nation’s history.4 Ottawa says it plans to welcome up to half a million new residents each year for the next three years.

Federal Policy

On January 1st, the federal government brought into effect a two-year ban on foreign buyers in an effort to increase supply for Canadians.

“This ban on foreign buyers will have little impact on the widespread housing shortages our nation faces. The small number of urban residential homes that would have been sold to non-residents are a drop in the bucket compared to the millions of units needed to provide adequate shelter for our citizens,” said Soper.

In December, the Office of the Superintendent of Financial Institutions (OSFI) confirmed that it would not be lowering the minimum qualifying rate for mortgages, out of an abundance of caution in uncertain economic times.

The stress test is an effective tool that has been successful in ensuring Canadians can withstand higher lending rates and tighter economic conditions. It is as a result of such policies that Canada has the low rate of mortgage defaults it does. Going forward, however, with interest rates likely to hold steady, Royal LePage believes this is the right time to ease up on such tight restrictions and allow more Canadians the opportunity to enter the housing market.

Interest Rates

Last month, the Bank of Canada raised its key overnight lending rate for the seventh time in a year to 4.25 per cent. The central bank hinted that rate hikes may be coming to an end; welcome news for the millions of Canadians who hold variable rate mortgages and have seen their principal payments slashed or their monthly payments increase materially over the last nine months. While inflation has not come down as much or as quickly as officials might have hoped, the country’s strong job market continues to bolster the economy. Economists are divided on whether or not another rate hike is in store later this month.


In December, Royal LePage issued its 2023 Market Survey Forecast, projecting that the aggregate price of a home in Canada will decrease a modest 1.0 per cent in the fourth quarter of 2023, compared to the same quarter in 2022.

The first quarter of 2022 marked the height of pandemic-fueled exuberance in the Canadian housing market. As a result, the year-over-year comparison in the first quarter of 2023 will show the steepest decline in prices. On a quarter-over-quarter basis, the national aggregate home price is expected to flatten in Q2, before beginning to modestly recover over the remainder of the year. At the same time, year-over-year comparisons are expected to show progressively less price decline as the year goes on.


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