Canada: House prices see record annual decline in March
According to the Teranet-National Bank House Price Index, house prices decreased 6.9% annually in March, down from February’s 4.7% decrease and marking the sharpest drop on record. Meanwhile, housing starts fell 11% in March from February. Over Q1 as a whole, housing starts averaged notably lower than in Q4, boding poorly for residential investment in the first quarter.
More positively, the housing market showed some signs of bottoming out in sequential terms: House prices increased 0.5% month on month in March, breaking a streak of nine straight month-on-month contractions. Moreover, home sales rose in March from February.
On housing starts, TD Economics’ Rishi Sondhi said:
“March may have been impacted by early-month winter storms across parts of the country. That said, the scale of retrenchment has been steeper-than-anticipated in the first quarter, as multi-family and single-detached units both moved lower. The downtrend in building permits to roughly pre-pandemic levels points to this lower level of activity being maintained over the near-term.”