Fledgling Canadian Housing Market Momentum Hits Pause in July

Ottawa, ON August 15, 2024 - While there were early signs of renewed momentum in June following the Bank of Canada’s first interest rate cut since 2020, activity in Canada’s housing market took a pause in July.

Home sales activity recorded over Canadian MLS® Systems edged back by 0.7%on a month-over-month basis in July 2024, giving back a small portion ofJune’s post-first rate cut gain. (Chart A)

“With another rate cut announced on July 24, we’ve now seen two rate cuts in a row, and the expected pace of future policy easing has steepened considerably, with markets now anticipating rate cuts at every remainingBank of Canada decision this year,” said Shaun Cathcart, CREA’s SeniorEconomist. “Combine that with a record amount of demand waiting in the wings, and the forecast for a rekindling of Canadian housing activity going into 2025 has just gone from a layup to a slam dunk.”

  As of the end of July 2024, there were about 183,450 properties listed for sale on all Canadian MLS® Systems, up 22.7% from a year earlier but still about 10% below historical averages of more than 200,000 for this time of the year.

New listings posted a slight 0.9% month-over-month increase in July. The national increase was led by a much-needed boost in new supply in Calgary.

With new listings up slightly and sales down slightly, in July, the national sales-to-new listings ratio eased back to 52.7% compared to 53.5%in June. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to- new listings ratio between 45% and 65% generally consistent with balanced housing market conditions.