While home sales remain higher on an annual basis in most of Canada’s major housing markets, activity—and prices— have largely cooled down compared to May.

That’s according to early monthly data from the country’s largest real estate boards.

In Toronto, sales were down 18% compared to the previous month while the average benchmark price is down a little over 1%.

Despite high demand and a continuing supply shortage, “home sales were hampered laJune housing market chilst month by uncertainty surrounding the Bank of Canada’s outlook on inflation and interest rates,” Toronto Regional Real Estate Board President Paul Baron remarked.

It was a similar story in Vancouver and Montreal where home sales are down 13% and 8.5%, respectively, on a month-over-month basis.

While the summer months tend to see a slowdown in activity compared to the busier spring homebuying season, there’s agreement among the real estate boards that the Bank of Canada’s resumption of its rate hikes is having an impact on homebuyer sentiment.

“A further rise in interest rates and the decline in new listings are sending a negative signal to market participants who could consider postponing their purchase or sale project,” said Charles Brant, Director of the Market Analysis Department for the Quebec Professional Association of Real Estate Brokers.

Activity is up from a year ago

Despite the seasonal slowdown, activity remains higher in most markets compared to the same time last year.

Strong activity was seen in Calgary, where sales are up nearly 11% while prices are 4.4% higher than a year ago.

“The demand for housing remains robust, bolstered by a healthy labour market and increased migration levels, which helps offset the impact of higher lending rates,” said CREB Chief Economist Ann-Marie Lurie.

In Toronto and Vancouver, sales activity was up by 16.5% and 21%, respectively, compared to the same period last year.

Here’s a look at the June statistics from some of the country’s largest regional real estate boards:

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Greater Toronto Area

“The demand for ownership housing is stronger than last year, despite higher borrowing costs. With this said, home sales were hampered last month by uncertainty surrounding the Bank of Canada’s outlook on inflation and interest rates,” said TRREB President Paul Baron.”

Furthermore, a persistent lack of inventory likely sidelined some willing buyers because they couldn’t find a home meeting their needs. Simply put, you can’t buy what is not available,” he added.

Source: Toronto Regional Real Estate Board (TRREB)

Greater Vancouver Area

“The market continues to outperform expectations across all segments, but the apartment segment showed the most relative strength in June. The benchmark price of apartment homes is almost cresting the peak reached in 2022, while sales of apartments are now above the region’s 10-year seasonal average,” said Andrew Lis, REBGV Director of Economics and Data Analytics.

“This uniquely positions the apartment segment relative to the attached and detached segments where sales remained below the ten-year seasonal averages,” he added.

Source: Real Estate Board of Greater Vancouver (REBGV)

Montreal Census Metropolitan Area

“While it is true that June usually experiences less sustained transactional activity, a further rise in interest rates and the decline in new listings are sending a negative signal to market participants who could consider postponing their purchase or sale project,” said Charles Brant, Director of the QPAREB’s Market Analysis Department.

Source: Quebec Professional Association of Real Estate Brokers (QPAREB)

Calgary

“The demand for housing remains robust, bolstered by a healthy labour market and increased migration levels, which helps offset the impact of higher lending rates,” said CREB Chief Economist Ann-Marie Lurie.

“Although we have seen some recent improvements in new listings, particularly for apartment condominiums, it is not enough to cause any substantial change from the low inventory situation in our city,” she added. “While new home starts are on the rise, it will take time to observe their impact on supply.”

Source: Calgary Real Estate Board (CREB)

Ottawa

“Although June’s transactions surpassed last year’s, the number of sales, average prices, and new listings declined on a week-to-week basis over the course of the month,” said OREB President Ken Dekker. “Compounded by the typical summer decline in activity, the Bank of Canada’s interest rate adjustment at the beginning of the month may have also flattened the curve.”

“Supply is trending in the right direction,” he added. “The increase in inventory is encouraging and indicates sellers have confidence in the market. A growing resale housing stock will result in more selection for buyers and more sales.”

Source: Ottawa Real Estate Board (OREB)

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• Source: https://www.canadianmortgagetrends.com/2023/07/boc-rate-hike-put-a-chill-on-canadian-housing-in-june/