There were expectations in the housing industry the Bank of Canada’s rate cuts in June and July would drive up sales in August, however a report released Monday by the Canadian Real Estate Association (CREA) says Canadian housing markets are awaiting more stimulus. Sales did show an increase, but not at the rate expected, rising 1.3% on a month-over-month basis in August, reaching their highest level since January and their second highest in over a year. “Despite some fledgling signs of life to kick off the long-awaited monetary policy easing cycle, Canadian housing market activity still looks to be stuck in the same holding pattern it’s been in all year,” said CREA’s Senior Economist Shaun Cathcart. “That said, with ever more friendly interest rates now all but guaranteed later 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.” An upside, says CREA, is the number of homes available for sale increased 18.8% to 177,450 homes listed for sale on all Canadian MLS Systems year-over-year at the end of August 2024. New listings posted a 1.1% month-over-month increase in August and for the second month in a row, the national increase was led by a much-needed boost in new supply in Calgary. New listings were also up in Edmonton, offsetting a decline in the Greater Toronto Area. With sales increasing only slightly more than new listings in August, the national sales-to-new listings ratio remained relatively unchanged at 53%, compared to 52.9% in July. “In fact, the measure has barely moved from its current level since April. 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,” says Cathcart. “With more interest rate cuts now expected between now and next summer, the stage is set for a faster return of demand, but we’re clearly not there just yet,” said CREA Chair James Mabey. “There are typically four times in any given year that see a burst of new supply that can excite the market and draw buyers off the sidelines, and those are the first weeks of April, May, June, and September.” “So, the first week of September saw not only a third rate cut, but also a lot of new properties for buyers to consider. We’ll have to wait to see how they respond.” In terms of months of inventory, there were 4.1 months, nationally, at the end of August, down from 4.2 months at the end of July. “Continuing the theme of the market being in a holding pattern, this measure of market balance has been range-bound between 3.8 months and 4.2 months since last October. The long-term average is about five months of inventory,” says Cathcart. The actual national average home price was $649,100 in August 2024, almost unchanged (+0.1%) from August 2023.
