Will Canadian home sales keep slipping?

By Staff, with files from The Canadian Press | August 15, 2017 | Last updated on August 15, 2017
2 min read

The Canadian Real Estate Association says the national average price for homes sold in July fell compared with a year ago. This is the first year-over-year drop since February 2013.

CREA adds the average price for a home sold last month was $478,696, down 0.3% from July 2016, due to fewer sales in Toronto and Vancouver compared with last year.

But, excluding Greater Vancouver and Greater Toronto, the national average price was $381,297, up from $365,033 a year ago.

The drop in the national average price came as the number of homes sold through Canadian MLS systems fell for the fourth consecutive month, moving down 2.1% in July compared with June. CREA says July sales were down from June in close to two-thirds of all markets, led by the Greater Toronto Area, Calgary, Halifax-Dartmouth and Ottawa.

Read: GTA home prices cool again in July

But will this continue? An August 15 report from Scotiabank Global Economics suggests that even though nationwide home resales fell again in July, “it is possible that the pace of decline is already abating following much bigger declines of over 6% m/m in each of May and June.”

Derek Holt, vice-president & head of Capital Markets Economics, says in the report, “CREA points out an ebbing pace of declines in Toronto and hints at a potential bottoming in the correction following the April rule changes by Ontario.”

He adds, “[…] It’s possible that the magnitude of correction in May and June was amplified by walkaways from sales contracts signed over previous months as Ontario changed the rules of the game mid-contract for recent buyers, and so that amplified the magnitude of the weakness in those months and if so then the worst may well be over in a new normal for sales volumes.”

But we’ll have to wait and see, especially as interest rates change, he says. “How this balance plays out in the face of competing influences such as projected income gains and rate hikes is yet to be determined.”

Zoocasa, a real estate brokerage based in Toronto, shares the following highlights and insights:

  • The cooling Toronto housing market continues to be responsible for the majority of the decline in average prices in Canada. Looking back to April 2017, when government cooling measures where introduced, the average price has declined by 19% from the peak of $920,791. However, prices are still up 5.1% year-over-year from an average of $709,825 in July 2016.
  • Another factor in the decrease of average Canadian prices is the traditional summer slow down in the real estate market. Sales generally start to pick-up again in early September as the new school year begin.
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Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.