Home sales declined by 5.3 per cent in July, back to pre-COVID levels

Canada’s housing market continued to cool in July, with median house prices hitting $629,971 – an additional $104,000 reduction when excluding the Greater Toronto Area and Vancouver markets – compared to June’s average price of $665,850.

Home sales also fell, down 5.3% month-on-month. According to the monthly housing statistics report released by the Canadian Real Estate Association (CREA) on Monday, this marks the smallest drop in sales since housing activity began to slow some time ago. 5 months.

The report shows housing activity is returning to pre-pandemic levels and the housing market continues to stabilize after two years of the pandemic that sent Canadian housing activity ablaze with record prices and sales volumes.

That flame was later extinguished when the Bank of Canada raised interest rates in early 2022, increasing mortgage prices and giving buyers less stress.

GTA, Greater Vancouver and Fraser Valley, Calgary and Edmonton led the decline in home sales, which occurred in three-quarters of the local market, according to a statement from CREA.

“July saw a continuation of the trends we’ve been tracking for several months now; sales fell and prices fell in some of the relatively pricier parts of the country as well as where prices rose the most in the past two years. CREA President Jill Oudil said in the national statistics report.

She added that while strong demand from the start of the year has yet to subside, “some buyers will likely stay on the sidelines until they see what happens to borrowing costs and prices. re-entering the market, they’ll find a little more choice, but not as much as expected.”

Shaun Cathcart, senior economist at CREA, said newly listed properties also fell 5.3% – the same number as home sales fell – suggesting some sellers are “playing the game”. play wait”.

Prices are down but still increasing year by year

Robert Hogue, assistant chief economist at RBC, told CBC News that the report shows the market is “pretty much in full correction mode.”

“But what we see in July is that some of that weakness is starting to spread across the country as well, which is what we would expect, given that higher interest rates are pretty much affecting everyone buying from the shore. from sea to coast,” he said.

“Supply is relatively more than where demand is falling and prices are also starting to weaken, especially in Ontario.”

The MLS Home Price Index, which adjusts for the number of countries by volume and housing type so that Toronto and Vancouver don’t disproportionately affect the overall picture, fell 1.7 percent month-on-month but remained up. 10.9% over the same period last year. -five.

The CREA statistics report shows that prices fell in nine out of 10 provinces in July 2022, with declines in Ontario and BC, and small declines in Quebec, while Prairies held steady. In Atlantic Canada, Halifax-Darmouth fell slightly while the rest of the region continued to see prices rise at a slow but steady pace.

Hogue noted that smaller markets, which have seen dizzying price increases during the pandemic, are now seeing significant corrections: among them are Ontario cities like Cambridge, Brantford and London .

While markets across the country have essentially been in sync during the pandemic, there will be “diversity of outcomes” across Canadian housing markets going forward, he said.

The actual national average selling price, without seasonal adjustments, fell 5% year-on-year in July.

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