National home sales in July were down 0.7% from the previous month, the Canadian Real Estate Association reported today. While activity remains 4.8% higher compared to a year ago, sales are still down roughly 9% below their pre-pandemic level.
Slow sales have led to a build in available inventory, with 183,450 properties listed for sale as of the end of July. CREA says that’s up 22.7% from a year ago, though still 10% below the historical average.
The sales-to-new-listings ratio continued to ease in the month to 52.7% from 53.5% in June, which put some downward pressure on average prices in certain markets. The non-seasonally adjusted average national home price of $667,317 is down 4% from June and mostly unchanged from a year ago.
The MLS Home Price Index (HPI), which adjusts for seasonality, edged up 0.2% month-over-month but remains 3.9% lower compared to last year.
“Stability describes the Canadian housing market as we push through the heat of summer,” noted BMO’s Robert Kavcic. “Sales volumes are holding steady at reasonable levels, listing flow is solid but not saturating the market (with an exception or two), and prices are steady across most markets.”
Regionally, Alberta’s housing market remains relatively tight, though there has been a notable softening. Sellers’ markets continue to thrive across the Prairies and Atlantic Canada, thanks to affordability and significant inward migration, Kavcic added.
Vancouver and Montreal are largely balanced and have posted strong price performance over the past year. Conversely, Ontario shows more signs of weakness, with various areas experiencing buyers’ markets.
“Vancouver and Montreal look mostly balanced, and are posting better-than-average price performance over the past year,” he wrote. “Ontario remains the soft spot, with buyers’ markets still scattered across various areas of the province.”
Stage set for higher home sales later this year
While sales remained subdued last month, activity is expected to pick up over the remainder of the year with interest rates expected to continue their downward trajectory.
“We view July’s result as a speed bump on the way to a stronger second half showing for sales and prices amid a resilient economy, robust population growth, and falling rates,” wrote TD’s Rishi Sondhi. “August’s data will be telling, given that rates have continued their decline into this month.”
CREA chair James Mabey added that the “stage is increasingly being set” for a return to a more active housing market.
“At this point, many markets have a healthier amount of choice for buyers than has been the case in recent years, but the days of the slower and more relaxed house hunting experience may be somewhat numbered,” he said.
BMO’s Kavcic notes that the ongoing subdued sales were “entirely expected” since the recent Bank of Canada rate cuts have so far only provided relief to a limited number of borrowers.
“Few Canadians were using variable [mortgages], so the early phase of rate cuts wasn’t going to provide much relief,” he explained.
As of the first quarter, 12.9% of new mortgage borrowers opted for a variable-rate mortgage, according to figures from the Bank of Canada.
“Now, with the bond market building in more aggressive near-term easing in both the U.S. and Canada, fixed mortgage rates could continue to drift down,” Kavcic continued, adding that if we head into the next spring housing market with mortgage rates at around the 4% level, “things could get more interesting.”
“For now, the market remains very stable,” he said.
Cross-country roundup of home prices
Here’s a look at select provincial and municipal average house prices as of July.
July 2024 | Annual price change | |
---|---|---|
B.C. | $962,537 | -0.5% |
Ontario | $837,685 | -1.7% |
Quebec | $525,732 | +6.3% |
Alberta | $486,828 | +8.2% |
Manitoba | $376,770 | +6.9% |
New Brunswick | $308,800 | +6.4% |
Greater Vancouver | $1,185,800 | -1% |
Greater Toronto | $1,097,300 | -5% |
Victoria | $872,600 | -1.1% |
Barrie & District | $812,200 | -1.1% |
Ottawa | $648,900 | +0.1% |
Calgary | $588,600 | +8% |
Greater Montreal | $533,100 | +3.2% |
Halifax-Dartmouth | $551,600 | +3.8% |
Saskatoon | $406,500 | +7.1% |
Edmonton | $399,700 | +7.2% |
Winnipeg | $361,600 | +4.4% |
St. John’s | $349,700 | +5.9% |
*Some of the movements in the table above may be somewhat misleading since average prices simply take the total dollar value of sales in a month and divide it by the total number of units sold. The MLS Home Price Index, on the other hand, accounts for differences in house type and size and adjusts for seasonality.
Canadian real estate association crea
Last modified: August 15, 2024