The housing honeymoon is over, as sales declined in June due to rising mortgage rates and buyers moving to the sidelines, according real estate boards in Canada’s four largest metros..In Montreal, sales reached 4,078 homes, an 11% decrease from June 2021 and below June’s five-year average of 4,333 sales..Sales for single-family homes and condominiums fell 9% and 10% year-over-year, while plex sales tumbled by 25%, says Charles Brant, director of the Quebec Professional Association of Real Estate Brokers market analysis department..“Sales continue to slow down significantly in the Montreal area. In this context, new listings, which have been above the historical average since the month of May, are starting to have an impact on the inventory of properties for sale,” says Brant..“While market conditions remain very tight in favour of sellers, the next few months will finally usher in a downward trend in overbidding and a winding down of the continuing rise in prices compared to 2021.” added Brant. “Overall, prices have been stabilizing since last May, indicating that the Montreal market has reached its peak, especially in a context where it is becoming increasingly difficult for households to qualify for a mortgage loan.”.June’s single-family home median price was $570,000, a 12% increase from June last year, but $6,000 below what was reported in May..The condominium median price also increased 12% to $410,000, while the median price for the plex market climbed by 9% to $770,000..In the Greater Toronto Area, sales topped out at 6,474, a 41% year-over-year decrease as well as a decrease from May..The average selling price, $1,146,254, was a 5.3% increase over June 2021, but lower than May, continuing a month-over-month trend..Annual price growth was driven by less expensive market segments, including townhouses and condominium apartments, says Kevin Crigger, president of the Toronto Region Real Estate Board..“Home sales have been impacted by both the affordability challenge presented by mortgage rate hikes and the psychological effect wherein home buyers who can afford higher borrowing costs have put their decision on hold to see where home prices end up,” says Crigger. “Expect current market conditions to remain in place during the slower summer months. Once home prices stabilize, some buyers will re-enter the market despite higher borrowing costs.” .“Listings will be an important indicator to watch over the next few months. With the unemployment rate low, the majority of households aren’t in a position where they need to sell their home. If would-be sellers decide to take a wait-and-see attitude over the next few months, it’s possible that active listings could trend lower as well. This could cause market conditions to tighten somewhat, providing some support for home prices.” .In Calgary, 2,842 homes sold in June, a decline of by 2% over last June’s record high, says Ann-Marie Lurie, Calgary Real Estate Board’s chief economist. .“While sales activity has remained relatively strong for June levels, the decline was driven by a pullback in detached and semi-detached home sales,” says Lurie .“This is helping shift the market toward more balanced conditions and taking some of the pressure off prices,” says Lurie. “Prices eased slightly relative to May, however, the city-wide benchmark price of $543,900 is still over 13% higher than last year.”.Lurie adds year-to-date sales in Calgary are still at record levels and prices are still far above expectations for the year. To the end of June, 18,702 homes have traded hands, a 24% increase in sales compared to the end of June 2021..In Metro Vancouver sales were 2,444 homes, a 35% decrease from June 2021, and a 16.2% decrease from May 2022. .June's sales were 23.3% below the 10-year June sales average..The MLS Home Price Index composite benchmark price in Metro Vancouver was $1,235,900, a 12.4% increase over June 2021, a 2% decrease from May 2022, and a 2.2% decline over the past three months..“We’re seeing downward pressure on home prices due to declining home buyer activity, not increased supply,” says Daniel John, chair of the Real Estate Board of Greater Vancouver. “To meet Metro Vancouver’s long-term housing demands, we still need to significantly increase housing supply.” .The Canadian Real Estate Association will release a report next week detailing housing activity across the country.
