Canada’s real estate market continued to heat up in May with home sales posting their first year-over-year increase since June 2021 and the average price seeing its first year-over-year gain in a year.
The findings released by the Canadian Real Estate Association on Thursday suggested a marked shift away from the sluggish sales and slumping prices the country has seen since last year.
The association said the number of home sales in May totalled 54,241, a 1.4 per cent gain compared with the same month last year.
Seasonally adjusted sales for May were 40,220, up 5.1 per cent compared with April.
The increase came after months of buyers sitting on the sidelines awaiting a bottom for home prices. But as they waited, the Bank of Canada hiked interest rates, helping push up mortgage rates. After pausing earlier this year, the central bank hiked rates again this month in a bid to tame inflation.
In recent months, sellers have been as reticent as most buyers to wade into the market, reasoning that they would fetch far less for a home than neighbours had, when the market was still roaring during the height of the COVID-19 pandemic.
“Consumer confidence has risen sharply since March,” said Sherry Cooper, chief economist of Dominion Lending Centres, in an email to investors.
“But with household debt-to-income levels at near-record highs, the sensitivity to interest rates is extreme.”
However, more buyers and sellers appear to be ready to buy or list homes than the market saw earlier in the year.
Sales were up in about 70 per cent of all local markets, including Canada’s largest markets: the Greater Toronto Area, Montreal, Greater Vancouver, Calgary, Edmonton, and Ottawa, Cooper said.
Prices are moving upward too.
The actual national average home price was $729,044 in May, up 3.2 per cent from May 2022, CREA said.
The seasonally adjusted average home price was $715,290, up 2.7 per cent from April.
Despite the increases pointing to a rebound, Cerqua felt some aspects of the turnaround are still yet to be determined.
“The degree to which a recovery will be able to play out on the sales side as opposed to the price side will come down to supply, which remains quite low,” he said.
The number of newly listed properties totalled 59,237 in May, a 6.8 per cent rose from April. The actual number of new listings amounted to 87,037, still down 13.6 per cent from May 2022.
Robert Kavcic, senior economist with BMO Capital Markets, interpreted the figures as a sign that new listings are “showing a bit of life,” but he warned they are still about 16 per cent below the three-year pre-COVID average.
“So, while there are some very early signs of better listings flow, the dearth to this point has tightened up the market,” he wrote in a note to investors.
Housing activity ran “wild” in recent years when the Bank of Canada cut rates in recent years to historic lows but when rates started to rise, activity went “dark,” he said.
When it paused rates in January, the central bank was “effectively telling Canadians that the worst is over” and housing activity has risen quickly from the ashes.
“Following this sophisticated train of logic, it stands to reason that the Bank’s latest 25 basis point rate hike will again dampen market psychology somewhat and take some steam out of recent activity.”
This report by The Canadian Press was first published June 15, 2023.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
