The Canadian Real Estate Association says home sales in May fell compared with year ago as the average price of a home sold also moved lower. Real estate signage is shown in Oakville, Ont., west of Toronto on Saturday, May 11, 2024. THE CANADIAN PRESS/Richard Buchan
In May, Canada's real estate market continued to cool as both home sales and prices dropped, while listings increased, according to the Canadian Real Estate Association (CREA).
This decline was observed both month-over-month and year-over-year, but a potential turnaround could be on the horizon following the Bank of Canada's recent interest rate cut, the first in four years.
“May was another quiet month for housing activity in Canada, although it may prove to be the last of those now that interest rates have moved lower,” said CREA senior economist Shaun Cathcart.
Home sales in May fell by 5.9% compared to the same month last year and by 0.6% from April, after seasonal adjustments. The national average home price was $699,117, marking a 4% decrease from the previous year but a 1% increase from April.
CREA's benchmark price, which represents typical homes, was down 2.4% from last year and 0.2% from April, seasonally adjusted.
New residential listings rose by 13.5% nationally compared to last year and by 0.5% from April, after adjustments.
Regionally, the market showed varied trends. Greater Vancouver saw a 19.8% drop in sales compared to last year, and Greater Toronto experienced a 22.2% decline. Conversely, Edmonton saw a 19.7% increase in sales, and Winnipeg's activity was up by 14%.
High borrowing costs and uncertainty regarding the Bank of Canada's policies kept many buyers on the sidelines in May. However, this trend might shift following the central bank's interest rate cut in June, noted TD economist Rishi Sondhi.
"We're expecting a stronger performance in June, amid a decline in bond yields," Sondhi said. "Further rate relief is likely, setting the stage for a more robust second half of 2024."
