Since May, the Canadian real estate market has shown signs of stabilizing with price growth and sales activity slowing, and new listings catching up to last year’s levels. That was the case in July, as the Canadian Real Estate Association (CREA) reported a 17.9% month-over-month drop in national sales but an 8.7% year-over-year increase. With sales activity slowing, inventory now has a chance to build up.
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“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. This has been giving buyers more choice and balancing the market, which as of July was also slowing the rate of price growth,” said Larry Cerqua, Chair of CREA.
Month-Over-Month Sales Plunging in All Major Markets
The effect of the Bank of Canada’s July interest rate hike can now be seen in decreasing sales numbers as buyers grow more hesitant to enter the market. The largest month-over-month decrease in sales among major markets was found in the Greater Toronto Area, which experienced a 29.8% drop, followed by Hamilton-Burlington which dropped by 25.1% and Ottawa by 24%.
Year-over-year sales activity looks less bleak with most markets experiencing a more than 10% increase. Notably, Fraser Valley and Greater Vancouver experienced a 38.9% and 28.9% year-over-year increase in sales. Seasonality affects market activity and a slowdown in sales is to be expected in the peak summer months when Canadians are on vacation.
The overall drop in sales is giving the housing supply a boost with year-over-year listings up significantly for the first time in several months. Fraser Valley and Greater Vancouver’s new listings were up year-over-year by an impressive 17.5% and 17% respectively, while the GTA was not far behind with a 13.8% bump. Other markets experiencing an increase in annual new listings included Victoria, Calgary, Hamilton-Burlington, Kitchener-Waterloo and Niagara Region.
Some Markets Still Experiencing Price Growth
As demand and competition are slowing, price growth is expected to slow as well. The national average home price dropped by 0.4% from $760,600 in June to $757,300 in July. London-St.Thomas, Quebec City and Kitchener-Waterloo all experienced month-over-month price declines of more than 1.5%, while the GTA declined modestly by 0.9%. Sellers that are preparing to list their homes in the fall should work with a real estate agent to ensure their property is priced at fair market value based on the current factors.
Not all markets are slowing down, however, and month-over-month price gains could be seen in Saint John, Montreal, Saskatoon, Greater Vancouver, and Calgary.
If you’re considering entering the market, whether that’s through buying or selling, or both, it’s important to speak with a local realtor to learn about market conditions in your specific area. If you’re ready, give us a call today to speak with a qualified agent!
