Fledgling Canadian Housing Market Momentum Hits Pause in July

OTTAWA, ON, Aug. 15, 2024 /CNW/ - While there were early signs of renewed momentum in June following the Bank of Canada's first interest rate cut since 2020, activity in Canada's housing market took a pause in July.

Monthly home sales (CNW Group/Canadian Real Estate Association (CREA))

"With another rate cut announced on July 24, we've now seen two rate cuts in a row, and the expected pace of future policy easing has steepened considerably, with markets now anticipating rate cuts at every remaining Bank of Canada decision this year," said Shaun Cathcart, CREA's Senior Economist. "Combine that with a record amount of demand waiting in the wings, and the forecast for a rekindling of Canadian housing activity going into 2025 has just gone from a layup to a slam dunk."

Highlights:

• National home sales edged back 0.7% month-over-month in July.
• Actual (not seasonally adjusted) monthly activity came in 4.8% above July 2023.
• The number of newly listed properties ticked up 0.9% month-over-month.
• The MLS® Home Price Index (HPI) edged up 0.2% month-over-month but was down 3.9% year-over-year.
• The actual (not seasonally adjusted) national average sale price was almost unchanged (-0.2%) on a year-over-year basis in July.

Home sales activity recorded over Canadian MLS® Systems edged back by 0.7% on a month-over-month basis in July 2024, giving back a small portion of June's post-first rate cut gain.

Monthly changes in sales activity were generally small amongst the larger centres in July. Interestingly, declines in Calgary and the Greater Toronto Area were mostly offset by gains in Edmonton and Hamilton-Burlington.

As of the end of July 2024, there were about 183,450 properties listed for sale on all Canadian MLS® Systems, up 22.7% from a year earlier but still about 10% below historical averages of more than 200,000 for this time of the year.

New listings posted a slight 0.9% month-over-month increase in July. The national increase was led by a much-needed boost in new supply in Calgary.

With new listings up slightly and sales down slightly, in July, the national sales-to-new listings ratio eased back to 52.7% compared to 53.5% in June. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to- new listings ratio between 45% and 65% generally consistent with balanced housing market conditions.

"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," said James Mabey, Chair of CREA. "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. If you're hoping to get into the market ahead of the pack, contact a REALTOR® in your area today."

There were 4.2 months of inventory on a national basis at the end of July 2024, unchanged from the end of June. The long-term average is about five months of inventory.

The National Composite MLS® Home Price Index (HPI) edged up 0.2% from June to July. While a small increase, it was slightly larger than the June increase, making it just the second, and the largest, gain in the last year.

While prices were up slightly at the national level, they were held back by reduced activity in the largest and most expensive British Columbia and Ontario markets. Regionally, prices are rising in a growing number of markets – a majority at this point.

The non-seasonally adjusted National Composite MLS® HPI stood 3.9% below July 2023. This mostly reflects how prices took off last April, May, June, and July – something that was not repeated over that same period in 2024. It's mostly likely that year-over-year comparisons will improve from this point on.

The actual (not seasonally adjusted) national average home price was $667,317 in July 2024, almost unchanged (-0.2%) from July 2023.

The next CREA statistics package will be published on Monday, September 16, 2024.

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada's real estate boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada's largest single-industry associations, representing more than 160,000 REALTORS® through 65 real estate boards and associations.

Further information can be found at http://CREA.ca/statistics.

SOURCE Canadian Real Estate Association (CREA)

For more information, please contact: Pierre Leduc, Media Relations, The Canadian Real Estate Association, Tel.: [phone] or 613-884-1460, E-mail: [email protected]