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A cool summer arrives


The cooling of the Canadian housing market is undeniable. Sales and prices have been moderating across the country for the past few months and that trend appeared again in the June figures from the Canadian Real Estate Association.


June sales dropped 5.6% compared to May and plunged almost 24% from a year earlier. However, sales in June 2021 set an all-time record for the month.


The national average price for a home dipped 1.8% year-over-year to $665,850. With the biggest and busiest markets – Toronto and Vancouver – taken out of the calculation the national average price comes in at $551,000.


Supply constraints are also easing with a 4% increase in new listings from May to June. CREA’s sales-to-new listings ratio eased back to 51.7%, its lowest level since January 2015 and below the long-term average of 55%.


“The cost of borrowing has overtaken supply as the dominant factor affecting housing markets at the moment,” said Jill Oudil, Chair of CREA.


That statement was delivered before the Bank of Canada’s surprise, interest rate hike last week. The 100 basis-point boost puts the Bank’s trend-setting Policy Rate at 2.50%.


The out-sized increase is seen by many market watchers as an attention getting move as the Bank tries to rein-in galloping inflation.


The BoC has been clear that more hikes are coming. The next setting will be in September.

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