Canadian home sales fall for 5th month in a row, down 29 per cent from last July
The Canadian Real Estate Association says home sales fell for the fifth consecutive month between June and July, but the latest drop was the smallest of the five.
On a seasonally adjusted basis, the association says sales in July fell 5.3 per cent compared with June. The actual number of sales last month was 37,975, down 29 per cent compared with July last year.
"That leaves activity back in the pre-COVID range, or roughly 40 per cent below the peak of the demand-side blowout seen last year," said Robert Kavcic, BMO Capital Markets senior economist, in a note to analysts.
"Unadjusted, it was the quietest July for sales since the financial crisis in 2020."
July's drop in month-over-month sales was the smallest of the past five months. Market watchers said it's too soon to say whether that trend will continue.
Still, economists and CREA chair Jill Oudil said it is a continuation of the market cooling from the torrid pace seen last year and early this year, when bidding wars were the norm.
Much of the cooldown has been attributed to the Bank of Canada increasing its key interest rate by one percentage point to 2.5 per cent in July in the largest hike the country has seen in 24 years.
Mortgage rate changes tend to mirror such hikes, impacting buying power.
As the rates have risen and sales plummeted, many buyers have sat on sidelines, predicting better deals will come in the fall and frustrating sellers, who have had to come to terms with the fact that they likely won't fetch as much as neighbours who sold in the winter.
"There's definitely a lot more people who are waiting until September before they list properties and they're trying not to list in August, if they don't have to," said Davelle Morrison, a Toronto broker with Bosley Real Estate Ltd.
As a result, new listings in July totalled 73,436, down six per cent from last July and on a seasonally adjusted basis, down five per cent from June.
When homes were flying off the market earlier this year, people could buy before they sold their own place and have little risk of their property not selling.
Now, Morrison is telling people to sell their place first because of how long properties are sitting.
She's also telling her clients to "buckle up" if prices fall more and interest rates continue to rise.
The average sales price was $629,971, down five per cent from $662,924 last July and on a seasonally adjusted basis amounted to $650,760, a three per cent drop from June, CREA said.
Excluding the typically heated Greater Vancouver and Toronto Areas from the calculation cuts $104,000 from the national average price.
Kavcic feels the drops constitute a market correction that is playing out "almost everywhere, but to varying degrees."
"Southwestern Ontario is feeling it hardest, with markets like Kitchener-Waterloo and London down roughly 15 per cent from their high already," he said.
He's noticed Vancouver prices have now fallen over four consecutive months and Montreal has been more immune to but is not escaping the downturn with drops in the last two months.
"We view Alberta as the market most able to weather this storm because it had already stagnated for a number of years before the pandemic, never saw the same froth as Ontario, and is now supported by near-$100 oil and population inflows from other regions," Kavcic wrote.
"But, in a demonstration of the power of higher interest rates, even Edmonton and Calgary have been subject to a flattening (Calgary) or decline (Edmonton) in prices despite still-solid sales activity."
This report by The Canadian Press was first published Aug. 15, 2022.
CTVNews.ca wants to hear from Canadians who are taking steps to mitigate rising prices amid a higher inflation rate.
If you live in an apartment, then you've more than likely felt the effects of the dramatically increased rental rates in Canada. Personal finance contributor Christopher Liew explores some of the key factors contributing to the increased rental prices in Canada, along with some of the things that Canadians are doing to cope with the current market.
About a quarter of Canadians are losing confidence in the stock market and are now looking to cash out their investments, a new survey has found.
Canada is headed for a 'severe' and 'almost inevitable' recession in early 2023, according to the head of economics at Macquarie Group, which states Canada will face an approximately three per cent contraction in gross domestic product and a five per cent rise in its unemployment rate during the predicted recession.
Financial TikTok – or FinTok – has become one of the most popular trends on the platform, and is emerging as a go-to resource for Gen Z and millennial audiences looking to learn how to invest, budget or even spend more wisely.
As the cost of living continues to rise and pay gaps persist, there is a growing desire for more open discussions around earnings, something experts argue could help ensure everyone is being compensated fairly.
When it comes to uncomfortable conversations, matters of inheritance may be near the top of the list. But as the cost of living rises and the generational wage gap grows wider, experts say it is now more important than ever to open up that dialogue.
Canadian employers are anticipating the highest salary increase in two decades as they try to balance inflationary pressures, surging interest rates, recession risks and a tight labour market, a new survey has found.