National housing market slows again

Sales and prices were down between July and August

National housing market slows again

Sales across Canada’s housing market fell by 4.1% between July and August as a series of Bank of Canada rate hikes continued to take their toll.

New figures from the Canadian Real Estate Association (CREA) showed that seasonally adjusted sales came in at 38,345 last month, a marked slowdown from July, with the seasonally adjusted average price of a home falling by 2.3% on a monthly basis to $674,184.

Greater Vancouver, the Fraser Valley, Montreal, Ottawa, Hamilton-Burlington, and London and St. Thomas posted the most significant monthly declines, CREA said, with the association’s chair Larry Cerqua noting that buyers may be encouraged by the continuing cooldown.

“With sales slowing and new listings returning to more normal levels, demand and supply are continuing to come into better balance,” he said in a press release. “This is giving buyers more time and more choice.”

CREA senior economist Shaun Cathcart said slower activity “was expected” last month thanks to the Bank of Canada’s interest rate hike in July, and that prices were likely to remain subdued thanks to a milder pace of homebuying.

Newly listed homes increased slightly last month, inching upwards by 0.8% over July, with new listings now moving closer to average levels after a prolonged spell in the doldrums.

CREA said regional differences are becoming increasingly evident in the current market where prices are concerned, with growth continuing at a decent clip in Quebec and along the East Coast – compared with a “mixed bag” in Ontario, which has seen sizeable increases in some markets but noteworthy declines in others.

Canada’s central bank posted two consecutive 25-basis-point rate increases over the summer to stave off a housing market resurgence that had gathered steam in the spring, although it hit pause on rate jumps in its latest statement earlier this month in an apparent sign that its 10 hikes since March 2022 are having their desired effect.