The Canadian real estate market exhibited positive trends in June, with national home sales increasing by 1.5% compared to the previous month. Although this growth was smaller than in April and May, it still indicates a gradual recovery. Additionally, the number of transactions in June was 4.7% higher than the same period last year, marking the largest year-over-year increase in two years.
In terms of regional performance, British Columbia and Alberta experienced sales gains, offsetting a slight decline in the Greater Toronto Area (GTA). Larry Cerqua, Chair of the Canadian Real Estate Association (CREA), noted that housing markets are stabilizing as the summer season approaches, following a turbulent period over the past year. The recovery in new listings in recent months is expected to provide buyers with more options and help slow down price growth in the second half of the year.
Shaun Cathcart, CREA’s Senior Economist, highlighted the likelihood of price growth moderation in the coming months, influenced in part by recent Bank of Canada rate hikes. While upward pressure on prices may persist, it is expected to be less pronounced than in the previous three months.
The number of newly listed properties experienced a month-over-month increase of 5.9% in June. This positive trend builds upon the gains observed in April and May, signaling a recovery from the record low listings in March. Although new listings are still slightly below average, the upward trajectory suggests a more balanced market heading into the summer.
The sales-to-new listings ratio, which measures the relationship between sales and new listings, decreased to 63.6% in June compared to 66.4% in May and a peak of 68.3% in April. While this decline indicates a slight easing, the ratio remains higher than the long-term average of 55.2%.
At the end of June 2023, there were 3.1 months of inventory nationwide, consistent with the previous month and significantly lower than the peak in January. The long-term average for this measure is around five months, indicating a tighter market.
The MLS® Home Price Index (HPI) saw a 2% month-over-month increase in June, following similar gains in April and May. This notable rise in a single month was widespread across most local markets. Although the Aggregate Composite MLS® HPI still remains 4.5% below year-ago levels, it represents the smallest decline since November 2022.
In terms of the national average home price, it reached $709,218 in June 2023, reflecting a 6.7% year-over-year increase. It is important to note that this figure is heavily influenced by the GTA and British Columbia’s Lower Mainland. Excluding these regions from the calculation significantly reduces the national average price by over $130,000.
Overall, the Canadian real estate market is displaying signs of stabilization and recovery, with sales and new listings gradually improving. As housing markets enter a more balanced phase, buyers can expect greater choice and a potentially slower pace of price growth in the latter half of the year. To navigate these market conditions, individuals are encouraged to consult a local REALTOR® for guidance on buying or selling properties.
Stats and content from CREA