As is well known, the housing market has been buoyant in the recent term. Prices started rising virtually as soon as the pandemic struck in 2020. The pace accelerated a year later and has remained brisk ever since. Now the market has begun to shift gears. House price inflation is finally losing steam, and relatively quickly, at that.
The first signs of a downturn in the housing market came in July, when the house price index rose by only a percentage point month-on-month. In a “normal” environment, a one-point MoM increase would be considered large, but in this case it was like a breath of fresh air after several months of 2-3% rises. The turnaround became clearer in August, when the house price index fell by 0.4% – the first MoM drop since November 2019. The decline was driven by a 2.4% slide in single-family home prices, as condominium prices stood all but still during the month. Single-family home prices are generally more volatile than condominium prices, as data for each period are backed by fewer purchase agreements.