Benchmark home price for June remains nearly flat
As of the end of June, there were approximately 180,000 properties listed for sale on the Canadian multiple listings service, reflecting a 26 per cent increase from a year earlier. Despite this rise, the current number of listings remains below the historical average of around 200,000 for this time of year. On a seasonally adjusted basis, the end-of-June supply number increased modestly by 0.5 per cent from the end of May, indicating a potential slowdown in the national inventory buildup.
James Mabey, chair of CREA, highlighted the varied experiences for buyers across different regions in Canada.
Gillian Oxley, founder of Oxley Real Estate in Toronto said that the boost in supply in Toronto has created a shift in buyer behaviour.
“If you don’t have that pressure with multiple offers, maybe you’re going back to the house a second time. Maybe you’re going back a third time. Maybe you’re looking a little closer at how much storage space there is. There’s been a shift in the time consideration, which then makes buyers more thoughtful. There’s just a time consideration that buyers didn’t have in 2021. They did not have the luxury of time,” Oxley said.
On a national basis, there were 4.2 months of inventory at the end of June 2024, down from 4.3 months at the end of May. This marks the first month-over-month decline in inventory levels for 2024. The long-term average is about five months of inventory, suggesting that while there is more inventory than last year, it is still relatively tight by historical standards.
Overall sales increased by 3.7 per cent on a seasonally-adjusted basis in June, but remained 9.4 per cent lower than the previous year.
However, Oxley believes that the rate cut has infused the market with a long-missing sense of optimism.
“We’ve all been holding our breath, waiting, so even though it was just a quarter per cent, at least it was ‘okay, it’s starting,’” she said.
Sondhi anticipates further interest rate cuts later in the year, although he holds a more cautious outlook on affordability.
“Indeed, we think that markets will be stronger in the back half of the year, as the economy holds up and more meaningful interest rate relief is delivered. However, stretched affordability conditions will likely limit the degree of improvement.” Sondhi said.