Following the first cut to the overnight lending rate in four years, homebuyers are making a slow and steady return to the market, according to the most recent report from the Canadian Real Estate Association (CREA).
Home sales across Canadian MLS® Systems saw a boost last month, climbing 3.7% from May to June 2024, a positive sign after a relatively quiet period of activity.
“It wasn’t a ‘blow the doors off’ month by any means, but Canada’s housing numbers did perk up a bit on a month-over-month basis in June following the first Bank of Canada rate cut,” said Shaun Cathcart, CREA’s Senior Economist. “Year-over-year comparisons don’t look great mainly because of how many buyers were still jumping into the market last spring, but that’s a story about last year. What’s happening right now is that sales were up from May to June, market conditions tightened for the first time this year, and prices nationally ticked higher for the first time in 11 months.”
Inventory Levels Remain Below Historical Averages
By the end of June 2024, there were approximately 180,000 properties listed for sale across Canada, a 26% increase from a year earlier, but still below the historical average of 200,000 for this time of year. On a seasonally adjusted basis, inventory increased modestly by 0.5% from the end of May, indicating that the buildup of national inventory might be slowing down.
New listings saw a 1.5% month-over-month increase in June, driven mainly by the Greater Toronto Area and British Columbia’s Lower Mainland.
There were 4.2 months of inventory on a national basis at the end of June, down from 4.3 months at the end of May. This marks the first month-over-month decline in inventory this year.
Home Prices Report Modest Increase
The National Composite MLS® Home Price Index (HPI) edged up 0.1% from May to June. While a small increase, it’s notable as the first month-over-month gain in 11 months.
Prices are generally stable across much of the country, with some regions seeing steady increases, such as Calgary, Edmonton, Saskatoon, Montreal, and Quebec City
The actual (not seasonally adjusted) national average home price in June 2024 was $696,179, a 1.6% decrease from June 2023.
“The second half of 2024 is widely expected to see the beginnings of a slow and gradual return of buyers into the housing market,” said James Mabey, Chair of CREA. “Those buyers will face a considerably different shopping experience depending on where they are in Canada, from multiple offers in places like Calgary, to the most inventory to choose from in over a decade in places like Toronto.”
