Housing markets see no big price changes in August as buyers wait on rates
New house prices in Canada remained flat in August, following recent interest rate cuts by the Bank of Canada in June and July.
According to Statistics Canada, the new-house price index was unchanged from July, which had seen a modest increase of 0.2%. On a year-over-year basis, new-house prices also showed no change.
Canada’s housing market has been relatively muted in recent months, even after the central bank cut interest rates three times in quick succession earlier this year. While some economists expect the market to recover soon, they believe many potential buyers are waiting for rates to drop further before making a move.
Seller’s or buyer’s market?
The national housing market showed slight gains in home sales during August, both on a monthly and annual basis, according to WOWA.ca citing data from the Canadian Real Estate Association (CREA).
Nationally, home sales increased to 39,073 in August, a 1.2% increase from July and a 0.9% rise from the same time last year. This marked the highest number of monthly home sales since January. New listings were up 1.1% month-over-month, while active listings increased by 18.8% year-over-year.
The sales-to-new-listings ratio (SNLR) remained stable at 53% in August, up slightly from 52.9% in July. This suggests that the national housing market is balanced, with a reasonable level of demand relative to supply.
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Most provincial housing markets in Canada currently exhibit seller’s market conditions, where demand is higher than supply. However, Ontario stands as an exception, currently classified as a balanced market.
A seller’s market is indicated when the SNLR exceeds 60%, while a buyer’s market, where buyers have more options and negotiating power, occurs when the ratio falls below 40%. A balanced market is typically seen when the SNLR is between 40% and 60%.
Regional price movement
Across Canada, new-house prices were unchanged in 13 of the 27 metropolitan areas surveyed by StatCan. Prices increased in eight regions and declined in the rest.
The largest month-over-month decline was recorded in Calgary, Alberta, which experienced its first price drop since January. In contrast, new-house prices increased the most in Regina, Saskatchewan, and Oshawa, Ontario, where builders cited improving market conditions.
Year-over-year, the largest price increases were seen in Calgary (+4.1%), Trois-Rivières (+3.1%), and Edmonton (+2.1%). On the other hand, Kitchener–Cambridge–Waterloo and Ottawa both saw the largest declines, with prices falling 2.8%, followed by Sherbrooke (-1.7%).
In Saskatchewan, the benchmark home price fell just $100 short of its July 2024 record, slipping to $344,700 in August. This marked the first time in five months that Saskatchewan’s benchmark price did not break a record. Meanwhile, New Brunswick continued its upward trend, with its benchmark price reaching a record $309,200 for the fifth consecutive month.
“As expected, home prices are rising in affordable provinces, given strong demand and declining mortgage rates,” WOWA.ca said in its report. “In other provinces, home prices are suffering as they are well ahead of the real cost of production due to a high regulatory cost of production.”
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