Home-price skid hits four months amid steep interest rate hikes

Canada’s real-estate correction deepened, with prices falling for fourth straight month as the central bank ratchets up interest rates.

Benchmark home prices declined 1.7 per cent in July, to $789,600 according to data released Monday from the Canadian Real Estate Association. 

The number of sales also continued to drop, falling 5.3 per cent from June and 29.3 per cent from a year earlier, the data show. 

While an unprecedented boom drove Canadian home prices to record levels in the first two years of the COVID-19 pandemic, it has started to reverse since the Bank of Canada began raising interest rates. The benchmark overnight lending rate, which was holding at an emergency low of 0.25 per cent until March, is now at 2.5 per cent, with another outsized hike expected in September.