Canadian average home prices doubled over the past decade (as shown in the chart below) as cheap credit and lax lending flowed. But over the past year, the supply of buyers has been retreating amid unaffordable prices and rising finance costs, even if sellers refuse to lower prices, for now. Listing agents are complaining about ‘unrealistic’ sellers and owners are complaining about their agents. This is a late cycle hallmark. One thing for sure, if prices won’t bounce, motivated sellers will start lowering list prices, others will be forced to follow–and so it goes. An aging population with the bulk of their life savings in expensive-to-own-and-maintain-homes, needing to raise cash for retirement, does not have the upper hand here. See: Refuse to sell your house at these prices? Join the growing club:
“Many Canadians don’t like the prices their homes will fetch, refusing to test the waters in this weakening market.
The latest numbers from the Canadian Real Estate Association show new listings across the country fell 4.8 per cent in April from March, on a seasonally-adjusted basis.
That, said Bank of Montreal chief economist Douglas Porter, shows “potential sellers are unimpressed with the prices on offer.”
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