First National Financial LP

Residential Market Commentary - Housing market softens

  • First National Financial LP

Home sales and prices moderated in June according to the latest numbers from the Canadian Real Estate Association and the organization is downgrading its forecast for the longer term.

Sales crept up 1.5% in June compared to May and were 4.7% higher than a year earlier.  But there has been a continuing month-over-month slowing of sales growth since the peak in April.  Nearly 43,500 properties changed hands in June.

The national average home price came in at a little more than $702,000 last month, up 6.7% from a year ago.  But it is a notable drop from $720,000 reported in May.  Taking the biggest, busiest and most expensive markets – Toronto and Vancouver – out of the calculation drops June’s average price to about $672,000.

CREA’s preferred price measurement, the Aggregate Composite Home Price Index, rose 2.0% over May but is 4.5% lower than a year ago.

The bigger story according to CREA is the ongoing increase in new listings.  The number of homes added to inventory in June climbed by

5.9% compared to May, building on last month’s 7.6% gain and the 3.1% rise in April.

The bigger inventory and a sense of growing uncertainty, triggered by rising interest rates, has CREA updating its price and sales forecasts for the rest of this year.  The association has dropped its sales projection to just over 464,000 transactions in 2023, a 6.8% drop from last year.  The national average home price is expected to decline 0.2%, to about $702,400, with slower increases going forward.