The number of homes sold nationwide last July was down 29.3% from July 2021, according to the latest data from the Canadian Real Estate Association (CREA) released on Monday.
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On a monthly basis, house sales fell by 5.3% between June and July. “While this is the fifth straight month-on-month decline in real estate activity, it is also the weakest of the five,” ACI noted in its report.
Sales were particularly down in Greater Toronto, Greater Vancouver and Fraser Valley, Calgary and Edmonton.
“The trend of recent months continues: sales are slowing and prices are falling in some relatively more expensive markets across the country, as well as areas where prices have risen the most over the past two years,” said Jill Oudil, President the ICA, in a press release on Monday.
“However, the demand that was so strong a few months ago has not abated, but some buyers will probably wait and see what happens to borrowing costs and prices. When they come back on the market they will have a little more choice, but not as much as you might have thought,” he added.
CREA data shows that the number of properties listed is also down 5.3% month-on-month, suggesting some selling owners have also decided to wait despite the supply of properties for sale at historically low levels is.
“New registrations have gone down […]keeping the sales-to-registrations ratio at 51.7% – the lowest level since January 2015,” analyzed Marc Desormeaux, Senior Economist at Desjardins.
He believes the national sales-to-registrations ratio continues to push the Canadian market closer to buyer-friendly territory and points to further price declines over the next six months.
Regionally, most of the declines in recent months have been recorded in Ontario and, to a lesser extent, British Columbia. On the prairie, prices remain more or less stable, while in Quebec they are just beginning to fall. On the east coast, prices generally continue to rise, but at a much slower pace.
The real average price of homes sold in the country in July 2022 was $629,971, down 5% compared to the same month last year.
CREA notes that the national median price is heavily influenced by sales in Greater Vancouver and Greater Toronto, two of the busiest and most expensive markets in Canada. If we exclude these two markets from the calculation, the national median price actually falls by about $104,000.
Economist Marc Desormeaux estimates that average home selling prices in Canada will fall almost 25% by the end of next year from their peak in early 2022. “It will take time for this slowdown to spread to the broader Canadian economy and as a result we remain of the view that the central bank needs to cut interest rates in late 2023,” he said.