James Mabey, Chair of CREA
OTTAWA – While May was another relatively uneventful month for many Canadian housing markets with national month-over-month home sales edging slightly lower and new listings moving only a little higher, the Bank of Canada’s recent rate drop will likely lead to increased activity moving forward.
“May was another sleepy month for housing activity in Canada, although it may prove to be the last of those now that interest rates have moved lower,” said Shaun Cathcart, CREA’s Senior Economist. “The Bank of Canada’s June 5 rate cut may have only been 25 basis points, but the psychological effect for many who have been sitting on the sidelines was no doubt huge. The question now turns to further rate cuts – specifically, how fast, and how far?”
Home sales activity recorded over Canadian MLS® Systems dipped 0.6% between April and May 2024, remaining a little below the average of the last 10 years. Home prices are also largely sliding sideways.
The number of newly listed homes was up in May, though only by 0.5% on a month-over-month basis. The result of slower sales amid more new listings this year has been an increasing number of homes for sale across a majority Canadian housing markets.
As of the end of May 2024, there were about 175,000 properties listed for sale on all Canadian MLS® Systems, up 28.4% from a year earlier but still below historical averages.
“The spring housing market usually starts before all the snow has melted, somewhere around the beginning of April, but this year I believe a lot of people were waiting for the Bank of Canada to wave the green flag,” said James Mabey, Chair of CREA. “That first rate cut is expected to bring some pent-up demand back into the market, and those buyers will find there are more homes to choose from right now than at any other point in almost five years.”
With sales down slightly and new listings up a little in May, the national sales-to-new listings ratio eased to 52.6% compared to 53.3% in April. The long-term average for the national sales-to-new listings ratio is 55%. A sales-to-new listings ratio between 45% and 65% is generally consistent with balanced housing market conditions.
There were 4.4 months of inventory on a national basis at the end of May 2024, up from 4.2 months at the end of April and, looking past the volatility at the onset of the COVID-19 pandemic, the highest level for this measure since the fall of 2019. The long-term average is about five months of inventory.
The National Composite MLS® Home Price Index (HPI) dipped 0.2% from April to May.
Regionally, prices are generally sliding sideways across most of the country right now. The exceptions remain Calgary, Edmonton, and Saskatoon, where prices have steadily ticked higher since the beginning of last year.
The non-seasonally adjusted National Composite MLS® HPI stood 2.4% below May 2023. This mostly reflects how prices took off starting last April, something that hasn’t yet been repeated in 2024.
The actual (not seasonally adjusted) national average home price was $699,117 in May 2024, down 4% from May 2023.
Source: crea
