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  • Steve Huebl

Home sales in Canada’s largest cities picked up in June,but remain sluggish


The Bank of Canada’s rate cut last month likely contributed to the uptick in resale activity, but experts caution that the market remains sluggish by historical standards.


Home sales in Toronto, Vancouver and Montreal rose from May to June, according to preliminary data from local real estate boards. This marked the first monthly increase for several months for Vancouver and Montreal, and the first rise in five months for Toronto.

 

“The Bank of Canada’s rate cut last month provided some initial relief for homeowners and homebuyers,” TRREB Chief Market Analyst Jason Mercer said in a release.


Mercer says the June sales result suggests that most homebuyers will need multiple rate cuts before they enter the market. Previous polling by Ipsos for TRREB suggests 100 basis points (1.00%) worth of rate cuts will be needed to significantly boost home sales.


Home sales remain well down year-over-year


Despite the uptick in sales from May, sales are still down sharply compared to last year in most cities: Toronto (-16%), Vancouver (-19%) and Calgary (-13%).


In Vancouver, sales are nearly 25% below their 10-year average, and some believe the weakness will persist for months as high interest rates continue to weigh on housing activity.


“Despite record population growth and a buoyant job market in the region, which should support transaction levels in the coming months,” wrote National Bank Financial’s Daren King, “we don’t expect sales to jump drastically as affordability challenges will remain a major issue in the context of a policy rate that—despite upcoming cuts—will remain in restrictive territory for several months to come.”


And while average selling prices remain muted in most markets, Calgary was a notable exception, where prices are up 8.5% compared to last year.


It “continues to be a competitive market for some buyers with over 40% of the homes sold selling over list price,” noted Calgary Real Estate Board chief economist Ann-Marie Lurie.


Regional housing market roundup


Here’s a look at the June statistics from some of the country’s largest regional real estate boards:


Greater Toronto Area


“The GTA housing market is currently well-supplied. Recent home buyers have benefitted from substantial choice and therefore negotiating power on price,” said TRREB Chief Market Analyst Jason Mercer.


“Moving forward, as sales pick up alongside lower borrowing costs, elevated inventory levels will help mitigate against a quick run-up in selling prices,” he added.


Greater Vancouver Area


“The June data continued a trend we’ve been watching where buyers appear hesitant to transact in volumes we consider typical for this time of year, while sellers remain keen to bring their properties to market,” said Andrew Lis, Director of Economics and Data Analytics at Greater Vancouver Realtors.


“This dynamic is bringing inventory levels up to a healthy range not seen since before the pandemic,” he added. “This trend is providing buyers more selection to choose from and driving all market segments toward balanced condition.”


Calgary


“The pullback in sales reflects supply challenges in the lower price ranges, ultimately limiting sales activity,” said CREB chief economist Ann-Marie Lurie. “Inventory in the lower price ranges of each property type continue to fall, providing limited choices for potential purchasers looking for more affordable product. It also continues to be a competitive market for some buyers with over 40% of the homes sold selling over list price.”


Ottawa


“Ottawa continues to see steady activity as we head into the summer market,” said OREB President Curtis Fillier. “Unlike recent years, buyers have more room to wait, evaluate and be selective when searching for the right property at the right price, leading to a slight uptick in the days on market. Sellers are making moves as evidenced by the inventory and listings.”

 


Steve Huebl

Real Estate

July 8, 2024

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