How did the housing market perform in July?
Sales across Canada’s housing market were largely unchanged between June and July, falling marginally by 0.7% as year-over-year activity saw a significant jump.
New figures released by the Canadian Real Estate Association (CREA) showed that the number of newly listed properties continued to climb, increasing by 5.6% on a monthly basis, while average home prices ticked upwards by 1.1% month over month (declining by 1.5% compared with the same point last year).
A drop in sales activity in the Greater Toronto Area (GTA) was one of the main reasons for the slightly lower monthly figures nationally, CREA said, despite sales increasing in more than half of all local markets in July.
The sales increase compared with July 2022, when higher interest rates and surging borrowing costs gripped the housing market, was the largest annual jump for more than two years.
CREA chair Larry Cerqua said the figures showed buyers were enjoying greater choice in a more balanced market, factors which were slowing the rate of price growth across the country.
Nationally, there were 3.2 months of inventory at the end of July 2023—the first month-over-month increase since January but still almost two months below the long-term average for this measure 👉 https://t.co/ABP2i2KN0S #CREAStats pic.twitter.com/VOW3s8uX5k
— CREA | ACI (@CREA_ACI) August 15, 2023
Recent interest rate hikes by the Bank of Canada are also playing their part in moderating activity, according to CREA senior economist Shaun Cathcart.
“Sales and price growth are already showing signs of tapering off further in August in response to the Bank of Canada’s mid-July rate hike and messaging regarding above-target inflation for longer than previously expected,” he said.
“We’re probably looking at another round of ‘back to the sidelines’ for some buyers until there’s a higher level of certainty around interest rates going forward.”
The sales-to-new-listings ratio continued to drop in July as properties entered the market at a brisker clip than transactions taking place. That measure is now at 59.2%, down from 63% and June, although it remains higher than its long-term average (55.2%).
