Average home prices in Canada are set to rise around 4% this year and beyond as buyers bet interest rates have already peaked alongside strong demand for housing.
Average home prices were expected to rise about 4% and 8% in 2024 and 2025, respectively, according to a Reuters poll.
The Canadian Real Estate Association reported Tuesday that although July’s house sales recorded the highest year-over-year gain in more than two years, they were no different from June.
The number of residences sold in the month increased by 8.7% from the previous July to 41,186 on a non-seasonally adjusted basis.
Sales that were adjusted for season totaled 40,028, a 0.7% decrease from June. More than half of all local markets had an increase in sales in July, while the Greater Toronto Area, a generally hot housing market, saw a fall, turning the national statistic “slightly negative,” according to CREA.
The association has seen signs of stabilizing across the national housing market since May as prospective buyers acclimatize to a higher interest rate environment than many were anticipating.
“July continued along the same trend we’ve seen emerge in recent months, with sales levelling off and new listings returning in more normal numbers,” Larry Cerqua, CREA’s chair, said in a press release.
The average home price was $668,754, up 6.3 per cent from a year earlier.
On a seasonally-adjusted basis, the average was $690,867, a two per cent slide from June.
Meanwhile, new listings increased 5.6% seasonally adjusted to 67,636 but decreased 0.2% from last year to 73,215 overall.
The data, according to CREA’s senior economist Shaun Cathcart, show that prices have moderated and housing markets have calmed down recently.
He claimed that due to the Bank of Canada’s mid-July interest rate hike and message suggesting that inflation will be significantly higher than its two percent target for longer than projected, sales and price growth are already exhibiting symptoms of slowing down in August.
