Home sales across Canada rose in August to a seven-month high after the central bank cut interest rates for the second time this year in July. The sector also witnessed a rise in sales in June following the Bank of Canada’s first interest rate cut since 2020.
“Despite some fledgling signs of life to kick off the long-awaited monetary policy easing cycle, Canadian housing market activity still looks to be stuck in the same holding pattern it’s been in all year,” said Shaun Cathcart, CREA’s senior economist.
The latest data from the Canadian Real Estate Association (CREA) revealed that home sales recorded over the Canadian MLS Systems edged up by 1.3 percent month-on-month in August 2024, reaching their highest level since January and their second highest in over a year.
“That said, with ever more friendly interest rates now all but guaranteed later this year and into 2025, it makes sense that prospective buyers might continue to hold off for better affordability,” Cathcart added.
Property listings rise
New listings posted a 1.1 percent month-on-month increase in August. For the second month in a row, the national increase was led by new supply in Calgary. New listings also rose in Edmonton, offsetting a decline in the Greater Toronto Area.
With home sales across Canada rising by only slightly more than new listings in August, the national sales-to-new listings ratio rose to 53 percent from 52.9 percent in July. The long-term average for the national sales-to-new listings ratio reached 55 percent, with a sales-to-new listings ratio between 45 percent and 65 percent generally consistent with stable housing market conditions.
“With more interest rate cuts now expected between now and next summer, the stage is set for a faster return of demand, but we’re clearly not there just yet,” said James Mabey, chair of CREA.
High demand season’s impact
The CREA said that Canada witnesses a surge in home sales during four times of the year. Those are the first weeks of April, May, June, and September. “So, the first week of September saw not only a third rate cut, but also a lot of new properties for buyers to consider. We’ll have to wait to see how they respond,” added Mabey.
The report also noted that the actual national average home price was $649,100 (+0.1 percent) in August 2024, almost the same as in August 2023.
For more news on real estate, click here.
