As August dawned, Canada’s housing market showed signs of a slight cooling trend following a flurry of activity in June. The Canadian Real Estate Association reported a marginal 0.7% decrease in sales of existing homes compared to the previous month, while new listings saw a modest 0.9% increase.
- Sales and Listings:
- Sales volume dipped by 0.7% from June, yet remained 4.8% higher than the previous year.
- New listings increased by 0.9% on a month-over-month basis.
Despite a second rate cut from the Bank of Canada towards the end of July, the housing market response was not as significant as expected. CREA chair James Mabey noted that while the impact may not be visible in the July data, the conditions are gradually shifting towards a more active housing market.
- Market Outlook:
- Further rate cuts are anticipated, coupled with pent-up demand, which could fuel a resurgence in the housing market next year.
Economist Robert Kavcic from BMO highlighted that the market currently displays an aura of stability. Despite fluctuations in prices, activity levels, and interest rates in recent times, the current subdued market condition could be seen as positive by industry stakeholders.
- Market Dynamics:
- The rise in listings and a slight decrease in sales tilted the market slightly in favor of buyers, with the sales-to-listing ratio shifting to 52.7% in July.
- The national average home price saw a marginal 0.2% decline from the previous year to $667,317.
Regions in the Prairies and Atlantic Canada continued to exhibit favorable conditions for sellers due to affordability, while Vancouver and Montreal remained in a balanced state. Conversely, Ontario faced challenges with scattered buyer markets, although Toronto’s detached market showed resilience compared to the oversupply in the condo market.
As the anticipation of future rate cuts looms, particularly in both Canada and the U.S., Kavcic suggested that borrowing rates could soon see a decrease. This adjustment might infuse more activity into the housing market by the upcoming spring season.
In conclusion, the Canadian housing market is in a phase of stabilization, with subtle shifts indicating a potential for increased activity in the near future. As central banks gear up for key rate decisions in September, the housing landscape may witness further transformations that could impact buyers and sellers alike.
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