Fewer home sales and lower average housing prices in Canada compared to last year

Real estate activity across Canada in June showed a drop in both sales and housing prices compared to June 2023, says the Canadian Real Estate Association, though sales perked up a bit compared to May 2024. 

According to the latest numbers from CREA, home sales activity as registered in the Canadian Multiple Listing Service (MLS) went up by 3.7 per cent between May and June 2024. 

However, monthly sales activity was 9.4 per cent lower compared to June 2023.

The average home price in Canada for June 2024 was $696,179, which is a drop of 1.6 per cent compared to the year before.

In a press release, CREA senior economist Shawn Cathcart pointed out that June was not a "blow the doors off" month, but pointed to interest rate cuts as stimulating some sales.

"Canada's housing numbers did perk up a bit on a month-over-month basis in June following the first Bank of Canada rate cut," wrote Cathcart.

Not enough interest rate relief yet, economist says

BMO Capital Markets senior economist Robert Kavcic told CBC News he believes the overall story for Canada's housing market is that right now, it's not moving very much — which could be good news for potential buyers who could dodge the intense bidding wars of the last few years.

"Sales are pretty flat. Prices are very much flat across the country on a national level," said Kavcic.

However, he pointed out that different regions of Canada, as is often the case, have very different real estate markets.

"There are markets like Toronto and Vancouver where prices are falling, but you have areas like Calgary, Edmonton, Montreal, Atlantic Canada where affordability is a lot better and prices are actually rising in those markets," said Kavcic.

The economist also said his team's perspective is that the mortgage costs haven't dropped enough yet to deeply shift the cost of a home for many.

"Our view is that prices nationally are just going sideways for the rest of the year, and there just is not enough interest rate relief yet in the pipeline to make the calculation work from an affordability perspective," he said.

Realtors predict prices may rise more slowly than previously expected

CREA says it is now forecasting that the average home price for the year in 2024 will go up less than it initially predicted.

The organization had previously forecast a 4.9 per cent increase for the year overall, but now expects just a 2.5 per cent annual increase in the national average home price for 2024, to $694,393. 

CREA pins the lower forecast on a "quiet spring" and more sellers entering the market while many buyers did not do the same, increasing the supply of homes. 

This matches the experience of Toronto Realtor Anya Ettinger, who said, at least when it comes to condos, she sees months worth of available properties sitting on the market in her region.

"Sellers are really having a hard time coming to terms with the fact that they're not getting peak market pricing right now," said Ettinger.

However, the Realtor also pointed out that, when it comes to many semi-detached homes, she is still seeing those sell with multiple offers.

There were about 180,000 properties listed for sale across Canada at the end of June, up 26 per cent from a year earlier but still below historical averages of around 200,000 for this time of the year.