Canada’s ever-fluctuating real estate market is showing signs of stabilization this summer, according to the Canadian Real Estate Association.
Per CREA data, July marked a marginal month-over-month decline in home sales recorded over the country’s MLS Systems, with home sales inching down by 0.7 per cent.
While sales figures in July were trending upward in more than half of the country’s local markets, a larger decline in the Greater Toronto Area tipped the national scales toward the negative side. Sales were also down in the Fraser Valley area, effectively counteracting the gains observed in Montreal, Edmonton and Calgary.
The actual (not seasonally adjusted) count of transactions in July 2023 revealed an 8.7 per cent increase from the same time last year – the largest year-over-year national sales increase in more than two years.
“July continued along the same trend we’ve seen emerge in recent months, with sales levelling off and new listings returning in more normal numbers,” Larry Cerqua, CREA Chair, said. “This has been giving buyers more choice and balancing the market, which as of July was also slowing the rate of price growth.”
“Following a brief surge of activity in April, housing markets have settled down in recent months, with price growth now also moderating with its usual slight lag,” Shaun Cathcart, CREA’s senior economist said. “Sales and price growth are already showing signs of tapering off further in August in response to the Bank of Canada’s mid-July rate hike and messaging regarding above-target inflation for longer than previously expected. We’re probably looking at another round of ‘back to the sidelines’ for some buyers until there’s a higher level of certainty around interest rates going forward.”
The number of newly listed homes was up by 5.6 per cent month-over-month in July. Building on gains between April and June, new listings have returned to a near-normal level after hitting a 20-year low in March.
By the end of July, there were 3.2 months of inventory on a national basis – up from 3.1 months in May and June. While this was the first month-over-month increase since January, the measure still lags a full month behind the initial count for 2023 and nearly two months below the long-term average.
The Aggregate Composite MLS Home Price Index (HPI) saw a larger-than-normal increase of 1.1 per cent in July. However, that increase is only about half as large as the gains recorded between April and June. This is in line with sales having levelled off as new listings have been recovering.
Despite the smaller gain at the national level, price increases have still been observed in most local markets. On a national level, the actual (not seasonally adjusted) average home price clocked in at $668,754 by the end of July – up 6.3 per cent year-over-year.
