Home Canada Real Estate New Homeowners, Fresh Regrets: 2023’s Falling Home Prices Bring Losses in Home Values
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New Homeowners, Fresh Regrets: 2023’s Falling Home Prices Bring Losses in Home Values

If they had to sell their newly bought homes, owners would have to take a loss in many markets across the country.

by Andra Hopulele
2.2K views
3 min. read

With issues like inflation, the rapidly rising cost of living, and historically high mortgage rates, both homebuyers and sellers had a very challenging 2023. But, Canada’s owners are no strangers to housing stress, either.

Falling home prices may make many new owners regret their decision to finally take the plunge and buy a home a year before, when prices were still at all-time highs. Homeowners across the country are feeling the sting of their homes losing value and are contemplating a distressing reality: Their hard-bought homes are currently worth less than one year ago.

The year-over-year changes in home prices in the 67 largest cities in the country show that owners of single family homes in 18 cities and condo owners in 26 cities have seen their homes lose value in the last year. It used to be that real estate was the safest investment, but 2023 broke this unwritten rule. So, where in Canada’s largest cities are new homeowners most regretting their decision to buy?

That would be Burlington, ON. Single family homeowners who bought their home at the end of 2022 lost $163 every day for a year, which means their home is currently worth nearly $60,000 less than what they paid for it. When it comes to condos, it’s new owners in Mississauga, ON who were hit the hardest: Their newly acquired homes lost $36,600 in value, essentially depreciating by $100 on a daily basis.

Here are some more highlights from our most recent report:

  • Fortune favours the bold, but not in 2023: Many of the buyers who made the very hard decision to buy despite 2022’s harsh market conditions (prohibitively high home prices and discouraging mortgage rates) are being hit a year later by depreciating home values, as well.
  • Single family homeowners: In 18 large cities, new owners were cut off from building wealth for the past year, making the psychological price of buying a property even steeper.
  • Condo owners: Condo and apartment prices fell in 26 of Canada’s largest cities, pummeling the owners who managed to get on the property ladder by investing in this more affordable housing option at the end of 2022.
  • The silver lining: Things might be looking up for single family homeowners. The year-over-year price changes in November showed that home values were in freefall in 25 large cities, but one month was enough to slash that number by seven. However, condo prices continued their year-over-year downward path in 26 markets in December, as well.

 

Equity Interrupted: Single Family Homeowners in 18 Cities Take a Hit

New owners lose up to $163 per day for a whole year

Although the $163 that Burlington owners lost each day during the last year represents the worst-case scenario, single family owners in three more Ontario cities also went backwards in terms of home value: Owners in Kitchener, Mississauga, and Markham lost $109, $114, and $154 per day, respectively, totaling -$39,850, -$41,740 and a dramatic -$56,043 per year.

Percentage-wise, the decreases in home prices in these cities might seem benign, coming close to a meager 5%. But, that percentage drop translates to a more hard-hitting net amount, especially considering the tough market conditions during which these owners took the plunge.

 

 

Ontario almost single-handedly led this price drop trend, but price declines are biting into owners' equity in Kelowna, BC; Victoria, BC; and Regina, SK, as well. What used to be pockets of growth and strength across the province and the entire country are now areas of "very healthy correction," as Benjamin Tal, deputy chief economist at CIBC World Markets emphasized. In an interview for BNN Bloomberg, Tal stated:

“We have more supply and less demand. This is becoming a buyers’ market – a buyers’ market with no buyers.

[...] It's a very weak market. A dearth of listings had previously been propping prices up, but listings have increased as high interest rates and other costs put pressure on homeowners.

Prices went up by 45% over the course of breakfast during COVID-19, so what you're seeing now is a very healthy correction.”

What's more, CREA stats from as early as October 2023 reveal a marked slowdown in activity with signs pointing to the housing market likely going into "hibernation" until spring. And, although December just saw an uptick in sales activity, that was "likely just some of the sellers and buyers that were holding onto unrealistic pricing expectations last fall finally coming together to get deals done before the end of the year," according to CREA Senior Economist Shaun Cathcart.

Last year showed that a real estate investment can sometimes backfire. This means Canada's newest owners from these unlucky cities might have to wait more than others to build wealth, and way more than their counterparts in the five BC cities where home values increased by more than $100,000 and even $200,000. Vancouver, Richmond, Burnaby, Langley and Delta were squarely at the opposite end of this chart.

 

Condo Owners: Yesterday's Motivated Buyers Are Today's Disappointed Owners

 

Condo owners seem to be faring worse than single family homeowners. With 26 markets seeing year-over-year price drops for condos, the price correction for this segment is even more generalized. What is considered the more affordable housing option got progressively cheaper, putting condo owners' equity hopes on standby.

The three cities with the most significant percentage decreases were Lethbridge, AB; London, ON; and Mississauga, ON, with drops of 6.1%, 6% and 5.8%, respectively.

The biggest net losses were recorded in Barrie, ON; Victoria, BC; and Mississauga, ON. In just one year, owners here lost $77 to $100 every day to reach some quite discouraging total amounts (-$28,000, -$28,250 and -$36,600, respectively).

 

 

According to Tal in the same BNN Bloomberg article, "Canada’s condo market is at the forefront of the current slowdown."

And, not only are condo prices falling in more markets, but both demand and supply are down for this segment, too.

"... investors [are] pulling out of the space rapidly, while supply is still being built based on previous levels of demand. You have supply coming, but that's supply that started two years ago, not now, and the demand is going down. That's a sure-fire recipe for some slowing in the condo space, and that’s exactly what we’re seeing.

However, Tal cautioned that the slowdown in the near-term could discourage new builds and exacerbate Canada’s housing supply shortage, which will eventually drive prices up again.

“Two years from now when interest rates are (lower) and demand is there … the supply of new units will not be there."

However, the cities that buck the downward trend did so in a spectacular fashion: Condos in Coquitlam, BC; Halifax, NS; Richmond, BC and Calgary, AB added more than $50,000 in just one year. What's more, condo owners in a total of seven cities saw daily gains of at least $100 per day, which makes condos in these areas last year's "top earners."

Although owners in many cities had a less-than-stellar year when it came to their real estate investments, there are signs that point to a shift. Comparing November and December numbers, it becomes obvious that single family homeowners are seeing an improvement: In November, owners in no fewer than 25 large cities lost home value, whereas December data revealed a rosier market snapshot with single family homes losing value in only 18 cities.

Meanwhile, the condo segment continued its downward path, which means losses kept piling up for owners in 26 cities. Keeping an eye on the housing market and following this year's trends will reveal whether condo owners get some respite, as well.

However, given that real estate is a long-term investment, it's possible that condo owners are just looking at a longer timeframe for building equity. And, for the time being, they could focus on their other amazing win: The security and joy of being a homeowner are priceless.

CityProvinceSingle Family Home Price 2023Percentage Change 2023 vs. 2022Net Change 2023 vs. 2022Condo/Apartment Price 2023 Percentage Change 2023 vs. 2022Net Change 2023 vs. 2022
TorontoON$1,525,3710.4%$5,523$711,200-3.2%-$23,200
MontréalQC$680,0004.1%$26,800$446,0002.5%$11,000
CalgaryAB$662,25012.4%$73,200$321,40019.1%$51,600
OttawaON$704,9002.7%$18,600$417,2002.1%$8,500
EdmontonAB$441,0002.8%$12,000$232,0006.4%$14,000
WinnipegMB$346,6003.0%$10,200$228,0002.9%$6,500
MississaugaON$1,296,372-3.1%-$41,740$599,000-5.8%-$36,600
VancouverBC$2,535,2579.0%$208,858$784,3140.4%$3,423
BramptonON$1,097,204-2.6%-$28,797$552,400-3.0%-$17,300
HamiltonON$796,4190.0%$122$476,900-3.3%-$16,300
SurreyBC$1,601,4006.0%$91,000$529,1005.3%$26,500
Québec CityQC$370,00014.9%$48,000$250,0004.2%$10,100
HalifaxNS$520,8005.9%$29,200$455,50014.2%$56,500
LavalQC$530,0009.1%$44,000$390,0009.6%$34,000
LondonON$616,7002.6%$15,500$355,100-6.0%-$22,600
MarkhamON$1,686,366-3.2%-$56,043$696,700-1.2%-$8,400
VaughanON$1,662,1812.8%$44,946$693,800-0.1%-$700
GatineauQC$421,0005.3%$21,000$299,3505.0%$14,350
SaskatoonSK$421,7506.0%$23,932$223,400-0.4%-$900
KitchenerON$766,700-4.9%-$39,850$463,6009.2%$39,150
LongueuilQC$496,6441.8%$8,764$331,5160.6%$2,004
BurnabyBC$1,994,2676.8%$126,300$775,2675.1%$37,700
WindsorON$604,5003.1%$18,100$392,0001.9%$7,200
ReginaSK$322,469-0.8%-$2,646$211,6000.7%$1,400
OakvilleON$1,660,253-1.7%-$28,815$675,400-0.1%-$700
RichmondBC$2,111,4006.7%$133,200$744,0007.9%$54,600
Richmond HillON$1,802,089-1.3%-$23,576$641,5000.0%-$100
BurlingtonON$1,200,817-4.7%-$59,583$606,4000.3%$1,700
OshawaON$824,613-2.8%-$23,451$528,6002.9%$15,000
SherbrookeQC$357,0005.0%$17,000$265,0008.2%$20,000
Greater SudburyON$422,40015.0%$55,100N/AN/AN/A
AbbotsfordBC$1,167,1009.3%$99,200$446,40010.4%$42,200
LévisQC$335,0003.5%$11,250$219,5005.0%$10,500
CoquitlamBC$1,777,8004.7%$79,400$711,8009.0%$58,500
BarrieON$773,6000.6%$4,900$496,900-5.3%-$28,000
SaguenayQC$266,50014.9%$34,500N/AN/AN/A
KelownaBC$966,500-3.6%-$35,900$480,800-4.4%-$22,000
GuelphON$839,9003.7%$29,900$530,400-0.1%-$400
Trois-RivièresQC$326,87113.9%$39,871$250,0004.2%$10,000
WhitbyON$1,085,442-2.2%-$24,297$605,100-1.2%-$7,100
CambridgeON$727,000-0.8%-$5,900$497,7001.6%$7,700
St. CatharinesON$629,700-1.8%-$11,800$431,900-4.1%-$18,400
MiltonON$1,223,226-2.4%-$30,544$640,700-0.7%-$4,300
LangleyBC$1,606,5008.2%$122,200$596,4005.1%$28,700
KingstonON$557,1003.4%$18,400$430,200-0.3%-$1,400
AjaxON$1,060,073-1.8%-$19,056$578,8002.2%$12,700
WaterlooON$823,0503.1%$25,100$475,600-1.2%-$5,750
TerrebonneQC$483,7006.1%$27,700$340,0005.9%$19,000
SaanichBC$1,228,9325.3%$61,812$553,8141.6%$8,906
St. John'sNL$347,4004.3%$14,300$238,4004.7%$10,600
Thunder BayON$299,5008.6%$23,600N/AN/AN/A
DeltaBC$1,438,5338.0%$106,267$664,3334.7%$30,100
BrantfordON$681,4001.2%$8,200$379,400-1.4%-$5,400
Chatham-KentON$402,5004.5%$17,333N/AN/AN/A
ClaringtonON$891,7440.4%$3,531$540,300-3.0%-$16,500
Red DeerAB$381,98416.0%$52,737$170,863-3.0%-$5,284
NanaimoBC$781,9005.3%$39,700$392,7004.0%$15,200
Strathcona CountyAB$435,0002.8%$12,000$240,0004.8%$11,000
PickeringON$1,193,7230.0%-$377$618,800-1.3%-$8,000
LethbridgeAB$415,60312.5%$46,153$221,183-6.1%-$14,369
KamloopsBC$650,0003.9%$24,300$375,5004.2%$15,100
Saint-Jean-sur-RichelieuQC$447,5006.5%$27,500N/AN/AN/A
Niagara FallsON$629,700-1.8%-$11,800$431,900-4.1%-$18,400
ChilliwackBC$862,4007.4%$59,100$356,1009.2%$30,100
VictoriaBC$1,087,150-0.1%-$850$632,350-4.3%-$28,250
BrossardQC$699,0007.5%$49,000$367,500-4.8%-$18,500
Maple RidgeBC$1,245,0006.7%$78,400$533,5005.0%$25,200

 

 

Methodology

Point2, a division of Yardi Systems Inc., covers real estate trends and news. Point2 studies are based on internal data, public records, governmental sources, online research, and other reliable third-party agencies.

  • For this study, we analyzed condo prices and single family home prices in the 67 largest Canadian cities (all cities with a population of 90,000 residents or more).
  • *Cape Breton, NS, the 68th city with a population of more than 90,000 residents was excluded from the analysis due to lack of available data.
  • We compared condo and single family home prices from December 2022 to condo and single family home prices from December 2023 (the most recent available pricing data).
  • We then analyzed the price evolution for condos and single family homes in the 67 largest Canadian cities to discover the differences in price contractions and price increases.
  • For Ottawa, Winnipeg, Halifax, London, Windsor, Kelowna, St. Catharines, Kingston, St. John's, Thunder Bay, Brantford, Chatham-Kent, Strathcona County, Kamloops, Niagara Falls, and Brossard, we considered prices at the metro or regional level.
  • For Gatineau, Longueuil, Sherbrooke, Lévis, Saguenay, Trois-Rivières, Terrebonne, Thunder Bay, Chatham-Kent, Saint-Jean-sur-Richelieu, and Brossard, the report used the entire fourth quarter prices.
  • For five cities (Greater Sudbury, ON; Saguenay, QC; Thunder Bay, ON; Chatham-Kent, ON; and Saint-Jean-sur-Richelieu, QC) only single family price data was available. For Cape Breton, NS, only composite price data was available.

Fair Use

We encourage and freely grant you permission to reuse, host, or repost the story in this article. When doing so, we only ask that you kindly attribute the authors by linking to Point2Homes.com or this page so that your readers can learn more about this project, the research behind it and its methodology.

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