Completely rewrite the following article in a fresh and original style. Ensure the new content conveys the same sentiment and message as the original. The rewritten article should:
- Start with a compelling introduction that hooks the reader (do not label this section).
- Maintain any lists and points as they are, using numbering and bullet points where necessary. Rewrite the explanations and discussions around these points to make them fresh and original. Ensure the lists are formatted correctly with proper numbering or bullet points.
- Organize the content into clear, logical sections. Subheadings are not mandatory. Each section should have a subheading only if it enhances readability and comprehension.
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End with a strong conclusion that summarizes the key points and provides a closing thought or call to action (do not label this section).
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Ensure it is formatted properly with adequate line spacing
Make sure the article flows coherently, is engaging, and keeps the reader interested until the end. Reorganize and structure the content efficiently to enhance readability and comprehension. Use varied sentence structures and vocabulary to avoid monotony. Avoid directly copying any sentences or phrases from the original content. Here is the original content:
Canadian real estate prices continued its downtrend last month, printing even larger losses. Canadian Real Estate Association (CREA) data shows the price of a benchmark (typical) home fell in October, despite a surge in sales. Prices continued to grind lower and are now similar to where they were 3 years ago. Surging home sales are an encouraging sign of a return to market normalization, but several issues make it unclear if this trend will stick around.
Canadian Real Estate Prices Continue To See Downward Pressure
The CREA HPI composite benchmark, showing the price of a typical home across Canada.
Source: CREA; Better Dwelling.
CREA’s benchmark price shows a typical home made an even sharper drop last month. The composite fell 0.8% (-$5,500 ) lower to $707,700 in October, following a 0.6% (-$4,600) drop in September. This marks the sixth consecutive monthly drop, with prices 2.7% (-$19,800) lower than last year. Home prices remain where they were roughly 3 years ago, even with backward-looking revisions to the index.
Canadian Real Estate Annual Price Declines Are Softening
The annual growth rate for the price of a benchmark home sold across Canada.
Source: CREA; Better Dwelling.
Annual growth is showing some improvements that are easy to spot in the above chart. That may be a little perplexing to some with such a strong monthly price drop but this is a base effect. The composite benchmark fell 0.8% (-$5,500) in October 2024, but “only” 1.4% (-$10,400) lower in October 2023. Those are both sharp drops for a 31 day period but relatively speaking, this year is an improvement. It’s like getting punched in the stomach twice last year but only once this year. Things are better but they aren’t exactly normal, nevermind good.
Price erosion is clearer when viewed against the all-time high. A benchmark home is 16.9% (-$144,300) lower than the record high reached in March 2022, more than 2-years ago. The benchmark has fallen to the lowest level since December 2023, similar to the level they hit back in September 2021.
Intensifying price declines are interesting, considering last month saw a surge in home sales. CREA reported 30% annual growth for existing home sales with just a 7% increase in new listings. October isn’t usually a busy month so it does tend to skew with unseasonable shifts.
Consequently, growth can mean a few things, such as a return to a healthy market, one of those unseasonable shifts that corrects by winter, or a one-time event such as the back-to-office order for government employees. It’s worth noting that many of the cities that saw a big surge in growth are in fact large hubs for government offices.
However, even with a sales surge the market is still in balanced territory. That emphasizes a base effect and the market’s weakness before this surge. It won’t be clear if this is a return to a normal market for a few months. There’s also the potential impact of the recent announcement that Canada will try to shrink its populationa big shift from where people thought demand was heading at the start of October.
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