Canadian home sales experienced a slight decline of 0.7% in July compared to June, while showing a 4.8% increase on an annual basis, according to recent data from the Canadian Real Estate Association (CREA).
Table of Contents
Home Price Index and National Trends
The Home Price Index (HPI) edged up by 0.2% month-over-month but saw a 3.9% drop year-over-year. The national average selling price remained almost unchanged from the previous year, reflecting stability in the market.
Impact of Bank of Canada Rate Cuts
Despite the Bank of Canada implementing a second rate cut in late July, the housing market has yet to see a significant boost in sales. CREA Chair James Mabey commented, “While it wasn’t apparent in the July housing data from across Canada, the stage is increasingly being set for the return of a more active housing market.”
Market Outlook for 2024
The CREA anticipates that further rate cuts and pent-up demand will likely revive the housing market in 2024. For now, the market remains stable, with reasonable sales volumes and a balanced flow of listings that are keeping prices steady.
Regional Market Conditions
The sales-to-listing ratio in July was 52.7%, a slight decrease from 53.5% in June, indicating a market leaning slightly more in favor of buyers. However, the market conditions vary by region:
- Prairies and Atlantic Canada: Markets remain favorable for sellers, driven by affordability.
- Vancouver and Montreal: These markets are mostly balanced.
- Ontario: While some areas show a buyer’s market, Toronto’s detached home market remains strong despite an oversupply in the condo sector.
Bank of Canada Interest Rate Announcement, Forecast & Latest Updates
Calgary Housing Market Forecast 2024, 2025, 2026 & 2030
Canada Housing Benefit 2024: Who is Eligible for $500 & How to Apply?
Future Rate Cuts and Mortgage Market
BMO economist Robert Kavcic noted that the recent rate cuts have had little immediate impact on the market, which was expected due to the limited use of variable-rate mortgages that respond quickly to such changes. However, as the bond market, which influences fixed-rate mortgages, begins to adjust to anticipated rate cuts in Canada and the U.S., borrowing rates could decrease.
“If we head into next spring with borrowing costs down around four per cent, things could get more interesting,” Kavcic added.
Upcoming Rate Decisions
The next rate decision by the Bank of Canada is scheduled for September 4, with the U.S. Federal Reserve set to announce its rate decision on September 18. These decisions could further influence the Canadian housing market in the coming months.
Leave a Reply