home sales record small decline from July to August

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The average price of a Canadian home sold in August was $637,673, a number that has fallen by more than 20 per cent since February.

Statistics released today by the Canadian Real Estate Association (CREA) show national home sales slowed slightly in August 2022.

Home sales are down by 24 per cent from this time last year. And the average selling price has lost almost $200,000 since hitting an all-time high of $816,720 in February.

HIGHLIGHTS

• National home sales edged down 1% on a month-over-month basis in August.
• Actual (not seasonally adjusted) monthly activity came in 24.7% below August 2021.
• The number of newly listed properties dropped 5.4% month-over-month.
• The MLS Home Price Index (HPI) edged down 1.6% month-over-month but was still up 7.1% year-over-year.
• The actual (not seasonally adjusted) national average sale price posted a 3.9% year-over-year decline in August.

Home sales recorded over Canadian MLS Systems edged down a slight 1% between July and August 2022. While this was the sixth consecutive month-over-month decline in housing activity, it was the smallest of the six as the national sales slowdown triggered by rising interest rates continues to moderate.

It was close to an even split between the number of markets where sales were up and those where sales were down. Gains were led by the Greater Toronto Area (GTA) and a large regional mix of other Ontario markets. These were offset by declines in Greater Vancouver, Calgary, Edmonton, Winnipeg, and Halifax-Dartmouth.

The actual (not seasonally adjusted) number of transactions in August 2022 came in 24.7% below the same month last year. While still a large decline, it was smaller than the 29.4% year-over-year drop recorded in July.

“August saw national sales hold steady month-to-month for the first time since February which, along with a stabilization of demand/supply conditions in many markets, could be an early sign that this year’s sharp adjustment in housing markets across Canada may have mostly run its course,” said Jill Oudil, Chair of CREA. “That said, some buyers may choose to remain on the sidelines until they see clearer signs of borrowing costs and prices also stabilizing. As the market continues to evolve, your best bet is to contact your local REALTOR® for information and guidance about how to navigate this rapidly changing environment,” continued Oudil.

“The stress test was unpopular with some when it was introduced. But as we have all now watched the Bank of Canada raise its key interest rate by 300 basis points in the space of five months, it’s clear many Canadians were protected by it,” said Shaun Cathcart, CREA’s Senior Economist. “But should there not be a flipside to the coin? The overnight rate is now officially above the Bank of Canada’s “neutral” range and not expected to go too much higher. This is not about “looser” or “tighter”, it is about what is appropriate given where rates are and where they are likely to go moving forward. OSFI is likely thinking hard about what makes sense given the new realities, and how to balance the community of interests they are tasked with securing.”

The number of newly listed homes fell to 5.4% on a month-over-month basis in August. This built on the 5.9% decline noted in July, as some sellers appear content to stay on the sidelines until more buyers are ready to get back into the market. The decline in new supply was broad-based, with listings decreasing in about 80% of local markets, including every large market except for Montreal, where new supply was mostly flat from July to August.