(Toronto) The slowdown in the national housing market continued in June with a further decline in home sales, but the Canadian Real Estate Association (CREA) noted the declines were smaller than in previous months.
Posted at 11:14 am
Updated at 12:43 p.m
Home sales totaled 48,176 in June, down 24% from 63,280 transactions in the same month in 2021, CREA said.
Seasonally adjusted sales were down nearly 6% from May.
The association attributed the declines, which were not as sharp as in April and May, to financial pressure from potential buyers as the Bank of Canada continued to hike interest rates.
The central bank raised its key interest rate by a full percentage point to 2.5% on Wednesday. It was Canada’s biggest rate hike in 24 years, but CREA pointed out that previous rate hikes had started to transform the market as early as last month.
“Home sales continue to fall due to rising interest rates and continued uncertainty,” CREA President Jill Oudil said in a press release.
“While the cost of borrowing has replaced supply as the main factor affecting the housing market right now, the supply gap is not being closed. »
The observations of M.me Oudil reflects what real estate agents have been reporting for months: the market is in a downturn.
In typically hyperactive markets like Greater Toronto and Greater Vancouver, realtors have been noticing properties for sale for much longer than they would have been a year earlier, or even in early 2022, when selling cadence was very high.
Buyers are now waiting to see how much their purchasing power will fall if interest rates rise, but have also postponed their offers because they expect prices to fall even further based on the forecast.
The national average home price in June fell 2% from the same month last year to $665,849. Seasonally adjusted, it was down 4% on May.
Last month, CREA forecast that the national median home price would rise 10.8% annually to $762,386 in 2022. She predicts the largest price increases for the Maritimes, followed by Ontario and Quebec.
Most of June’s price declines came from Ontario, but ACI also noted some easing in British Columbia and said prices on the prairies were “more or less stable.”
Quebec showed slight signs of slowing and prices on the East Coast continued to rise, although they were flat in Halifax-Dartmouth, ACI said.
New listings for sale increased by 4.1% in June compared to May, thanks in large part to an increase in listings in Montreal, and by 10% compared to June 2021.