Fewer home sales and lower average house prices in Canada compared to last year

According to the Canadian Real Estate Association, both sales and home prices in Canada declined in June compared to June 2023. However, sales increased slightly compared to May 2024.

According to the latest figures from CREA, residential property sales as registered with the Canadian Multiple Listing Service (MLS) increased by 3.7 percent between May and June 2024.

However, monthly sales activity was down 9.4 percent from June 2023.

The average house price in Canada was $696,179 in June 2024, a decrease of 1.6 percent from the previous year.

Shawn Cathcart, senior economist at CREA, pointed out in a press release that June was not a month in which stock sales would pick up significantly, but he noted that the rate cuts provided a boost to sales.

“Canada home prices rose slightly month-on-month in June following the Bank of Canada’s first rate cut,” Cathcart wrote.

Not enough rate cut yet, says economist

Robert Kavcic, senior economist at BMO Capital Markets, told CBC News he thinks the overall story for the Canadian housing market is that there’s not much movement right now. That could be good news for potential buyers who can avoid the intense bidding wars of the past few years.

“Sales are pretty flat. Prices are pretty much flat nationally across the country,” Kavcic said.

However, he pointed out that, as is often the case, different regions in Canada have very different real estate markets.

“There are markets like Toronto and Vancouver where prices are coming down, but there are also areas like Calgary, Edmonton, Montreal and Atlantic Canada where affordability is much better and prices in those markets are actually going up,” Kavcic said.

The economist also said his team’s perspective is that mortgage payments haven’t fallen enough yet to cause a big change in home prices for many people.

“We believe that prices will remain stable nationally for the rest of the year and that there are not enough rate cuts in the pipeline yet to make the calculation work from an affordability perspective,” he said.

Brokers predict prices will rise more slowly than previously expected

CREA now predicts that the average house price for 2024 will increase less than initially predicted.

The organization previously forecast a 4.9 percent increase for the full year, but now expects an annual increase of just 2.5 percent in the national median home price for 2024, to $694,393.

CREA bases the lower forecast on a “quiet spring” and more sellers entering the market while many buyers do not, increasing the supply of homes.

This is consistent with the experience of Toronto real estate agent Anya Ettinger, who says that in her area, when it comes to condos, there are months of available units on the market.

“Sellers are really finding it hard to accept that they are not benefiting from the highest market prices at the moment,” Ettinger said.

However, the agent also indicated that she still sees many semi-detached homes being sold with multiple bids.

At the end of June, there were about 180,000 properties for sale across Canada, up 26 percent from a year earlier, but still below the historical average of about 200,000 for this time of year.