July home sales dip since last month says CREA
OTTAWA— Canada's housing market showed a slight cooling in July compared to June, according to the Canadian Real Estate Association (CREA). Sales of existing homes fell by 0.7 percent, although they were up by 4.8 percent from a year ago. New listings rose by 0.9 percent month-over-month.
This modest decline occurred despite the Bank of Canada's second rate cut of the month. CREA Chair James Mabey noted that although the rate cuts haven't yet significantly boosted sales, the market conditions are beginning to shift. "While July's data didn't reflect a dramatic change, the groundwork is being laid for a more active housing market," Mabey said.
The CREA expects further rate cuts and rising demand to invigorate the housing market next year. For now, the market remains relatively steady, with sales and new listings balanced, and prices holding stable, according to BMO economist Robert Kavcic. He described the current state of the market as stable, given the recent volatility in prices, activity, and interest rates.
The increase in new listings and the decrease in sales have slightly tilted the market in favor of buyers, with the sales-to-listing ratio at 52.7 percent in July, down from 53.5 percent in June. Despite this, the market remains balanced overall. The national average home price fell slightly by 0.2 percent from last year to $667,317. The home price index, which reflects typical home sales, showed a 3.9 percent decline from last year, but a small increase of 0.2 percent from June.
In terms of regional markets, the Prairies and Atlantic Canada remain favorable for sellers due to affordability. Vancouver and Montreal's markets are balanced, while Ontario is experiencing more buyer-friendly conditions. Toronto's detached market remains stable, though the condo market is seeing an oversupply.
Kavcic noted that the recent rate cuts have had limited impact so far, partly because many buyers use fixed-rate mortgages, which don’t adjust immediately to rate changes. However, if borrowing costs decrease to around four percent by next spring, market conditions could become more dynamic.
The next rate decisions by the Bank of Canada and the U.S. Federal Reserve are scheduled for September 4 and September 18, respectively.
