July saw activity edge backwards
Activity across the Canadian housing market cooled in July despite a second consecutive Bank of Canada interest rate cut – but a homebuying resurgence in the months ahead is now a “slam dunk,” according to the Canadian Real Estate Association (CREA)’s chief economist.
The association’s latest housing market update showed that national home sales dipped 0.7% last month compared with June, with new listings jumping by 0.9% and prices inching marginally upwards.
Still CREA’s Shaun Cathcart said the prospect of further cuts down the line meant the market was almost certain to bounce back imminently. “With another rate cut announced on July 24, we’ve now seen two rate cuts in a row, and the expected pace of future policy easing has steepened considerably, with markets now anticipating rate cuts at every remaining Bank of Canada decision this year,” he said in remarks accompanying the news release.
“Combine that with a record amount of demand waiting in the wings, and the forecast for a rekindling of Canadian housing activity going into 2025 has just gone from a layup to a slam dunk.”
The central bank has trimmed its policy rate by 50 basis points in its last two announcements, but those moves have yet to spur a surge in purchase activity across the housing market.
The MLS Home Price Index (HPI), an adjusted gauge of benchmark prices across the country, was up 0.2% over June, although it remained 3.9% below the same time last year.
Calgary and the Greater Toronto Area (GTA) saw two of July’s most noteworthy declines, according to CREA, while Edmonton and Hamilton-Burlington posted higher sales compared with June.
The sales-to-new listings ratio across the country regressed from June, slipping to 52.7% compared with 53.5%, with 4.2 months of inventory available across the country – unchanged from the prior month.
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