A look at where the ‘most pronounced’ housing corrections are taking place in Ontario

"These places are expected to continue seeing the biggest correction," a new report from Desjardins states.

Home sales and average prices have fallen sharply throughout Canada since the pandemic peaks, but that correction has “slowed considerably” overall, though some communities are expected to continue seeing the biggest declines, a new report indicates.

A report published Monday by financial service company Desjardins took a look at expectations for Ontario’s housing market.

It notes that there is “significant variability” in real estate data throughout Ontario communities.

“Supported by buyers’ desire for more space when working and educating children from home, homebuying activity surged most significantly in smaller Ontario centres during the pandemic,” the report states.

“While we expect home sales and values to find a bottom in the second half of 2023, these smaller cities should continue to experience some of the most pronounced corrections in Ontario.”

Desjardins noted that the main catalyst for the housing correction was the tightening of monetary policy that began in March 2022.

But the company says Canadian prices will likely start rising after bottoming out in the second half of this year, and new home builds — which have also fallen — should bottom out early next year before climbing higher.

“This change in fortune will likely be the result of interest rate cuts following a prolonged pause by the Bank of Canada,” the report states.