Residential Market Commentary - Robust rebound in June
Home sales and prices rebounded sharply in June. The latest figures from the Canadian Real Estate Association show purchases up more than 15% compared to a year ago. The national average price is 6.5% higher, at $539,000. (With Toronto and Vancouver taken out the average price drops to $432,000.)
Day-to-day tracking suggests July will be strong as well.
Market activity plunged to record lows in March and April as buyers and sellers came to grips with the various COVID restrictions put in place by all levels of government across the country. But, by June, the buyers were back, seemingly confident in their employment and livelihoods.
Sellers have not been so quick to return and the sales-to-new listings ratio has climbed to nearly 64%, solidly a sellers’ market. A balanced ratio is between 40% and 60%. Anything below 40% is considered a buyers’ market.
Assurances from the Bank of Canada that interest rates will remain at record lows “for a long time” will likely help maintain what CREA’s chief economist, Shaun Cathcart, describes as “cautious optimism” in the market.
The expectation is that the market will remain strong through the traditional “buying season”. But as government aid programs wind down and mortgage deferrals expire that optimism may decline and the appeal of ultra-low interest rates could diminish.