Zoocasa analyst highlights the housing market's sales prospects for the latter half of the year
While the end of summer has seen home sales start to trickle, activity will only truly pick up once fall begins, according to Lauren Haw, broker of record and industry relations officer at Zoocasa.
This is despite a slight cooling in national sales in July, which saw a 0.7% monthly decline. This slight slowdown actually gave new listings time to return to healthier levels, Zoocasa said in its report.
“Seasonality can somewhat predict the rate of activity in the real estate market and the two hottest seasons tend to be early spring and early fall,” Haw said.
“Most people put their home buying plans on hold in the summer, but buyers – both investors and home buyers – will be back from the summer hiatus with renewed energy and focus.”
On the other hand, Haw is not expecting sellers to match this vigour.
“Sellers, afraid of the rate rise and quiet media over the summer, will wait through September to see what prices do before deciding to list or not,” Haw said.
In particular, Bill C-18 (known as the Online News Act) will likely have a disproportionate impact on the housing market as Canadians’ ability to receive information will become severely limited. The legislation blocks Canadian news content from platforms like Facebook and Instagram.
“Real estate news will not be as readily available for consumers with questions or concerns about the market, leading to hesitancy and caution among sellers,” Zoocasa warned.
“If the demand is there, sellers will list, but not until they see renewed interest,” Haw added.
Canada's housing and mortgage markets, while calmer than the pandemic-fueled frenzy, pose challenges for appraisers.
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 25, 2023
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Inventory challenges likely to persist
The Zoocasa analysis noted that while new listings in July started to catch up or even exceed 2022 levels in various markets, it will be a while before inventory issues completely dissipate.
“Rising immigration coupled with increased international student enrolment is especially straining the affordable housing supply in post-secondary cities such as Guelph, Kitchener-Waterloo, and Kingston,” Zoocasa said.
Resurgent activity among sellers would be crucial in revving up market supply.
“This continued, historically low supply of homes will keep prices buoyant enough to give some sellers confidence, with new listings likely to peak in October,” Haw said.
