After a record-breaking spring for Canadian home sales, buying and selling activity across the country has continued to trend downward during the early summer months.
In its National Statistics report released today for June, the Canadian Real Estate Association (CREA) announced that Canadian home sales declined by 8.4 percent between May and June 2021.
This marks the third consecutive month of dwindling home sales since the market set an all-time record in March 2021, CREA said.
Following the springtime peak, CREA reports that sales are now down a cumulative 25 percent. However, June transactions still set a record, with the number of transactions up 13.6 percent year-over-year, a new high for the month.
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Although market activity remains robust in many communities, CREA’s chair Cliff Stevenson explained that conditions have “noticeably calmed down” during the past few months.
“There remains a shortage of supply in many parts of the country, but at least there isn’t the same level of competition among buyers we were seeing a few months ago,” said Stevenson in the news release that accompanied the June report.
The number of new properties that hit the market dropped 0.7 percent in June compared to the previous month. The national sales-to-new listings ratio was 69.2 percent last month, the lowest reading since August 2020, CREA reported. The long-term average for the national sales-to-new listings ratio was reported at 54.6 percent, and has been steadily moderating since peaking at 90.8 percent in January.
By the end of June, there was a 2.3-month supply of available inventory nationwide, a slight increase over May’s 2.1 months of supply and the record-low of 1.8 months that was set in March.
With little change recorded on the national level for new home supply during June, CREA noted that about half of local markets saw gains, which is “welcome news for frustrated buyers.” When comparing sales-to-new listings ratio with long-term averages, more than half of local markets were also reported to be in balanced territory last month — a shake up from the past year when a larger portion of communities were in seller’s market territory, CREA said.
“It feels like maybe the theme of this summer is ‘slowly getting back to normal,’ in our own lives and for many housing markets across Canada as well,” said Shaun Cathcart, CREA’s Senior Economist, in the report.
“That said, it’s a long road to get back to normal, and for many housing markets the main issue is that supply shortages are as acute as ever,” he added.
Cathcart pointed out that the break we’ve seen in terms of population growth is likely coming to an end. While the “frenzy and emotion” of the earlier points of the pandemic have passed, Cathcart explained that the makings of a seller’s market are still in place.
Last month, the aggregate composite MLS Home Price Index (HPI) increased by 0.9 percent monthly, while the non-seasonally adjusted aggregate composite MLS HPI was up 24.4 percent annually.
The actual — not seasonally adjusted — average price of a home at the national level was a little over $679,000 in June, 25.9 percent higher than the same month in 2020. CREA noted that the average national home price is heavily influenced by Canada’s two most expensive markets, Greater Vancouver and the Greater Toronto Area. Factoring out these two regions would reduce the national average price by about $135,000, said CREA.