Canada: Houses Selling at $200k Discounts

As the strengthening dollar plays havoc with other countries’ currencies, they too are having to raise rates to try and re-establish some kind of parity. In Canada, the Big Six banks recently raised their rates from 3.70% to 4.70%….

Royal Bank of Canada was the first of the big banks to announce it will hike its prime lending rate following the Bank of Canada’s larger-than-expected increase to its benchmark rate.

RBC, TD Bank, Canadian Imperial Bank of Commerce, Bank of Montreal, Scotiabank and National Bank of Canada will raise their prime rates by a full percentage point to 4.70 per cent, from 3.70 per cent, effective Thursday. Prime rates are tied to many types of loans including variable mortgage rates, home equity lines of credit and auto loans.

It’s typical to see the major Canadian banks follow in the footsteps of the central bank and adjust their prime rates in lockstep.

. . . and now we have this headline as a result of the above:

MSN/The National Post headline: The froth is off: Canadian houses now selling at $200K discounts

Tristin Hopper - Monday, July 18, 2022…

The once-red hot Canadian real estate market is beginning to witness a trend that would have been unthinkable just months ago: Homes are starting to sell at a discount.

In Victoria, a luxury five-bedroom listed at $2.25 million ended up selling at $1.93 million — a drop of $320,000. In the same month, a home on the other coast — in Halifax — sold at $140,000 below its list price of $900,000.

The Toronto suburbs, in particular, are yielding a near-daily stream of homes sold at discounts of more than $100,000.