July 2024 showed a stall in Canada’s housing market momentum after a promising June, following the Bank of Canada’s first interest rate cut since 2020. According to the Canadian Real Estate Association (CREA), national home sales activity edged back slightly, with a 0.7% decline from June. However, the CREA suggests this may be just a temporary lull, as expectations for continued rate cuts and rising demand suggest a strong resurgence in the market moving into 2025.
Key Highlights for July 2024
In July, national home sales activity slipped by 0.7% compared to the previous month, though it remained 4.8% higher than in July 2023. The unadjusted national average sale price also declined to $667,317, down slightly by 0.2% from the same period last year.
Despite a 22.7% year-over-year increase in the number of properties listed for sale, the overall inventory remains about 10% below historical averages, with 183,450 properties available nationwide. The number of newly listed properties saw a 0.9% increase, largely due to a significant boost in supply from Calgary. The national sales-to-new listings ratio eased to 52.7%, reflecting a market that is still balanced but trending toward buyers’ favour. Inventory levels remained stable, with 4.2 months of supply, similar to June’s numbers, but below the long-term average of five months.
Regional Price Trends
While national home prices saw a slight increase, regional variations were notable. British Columbia and Ontario, the largest and priciest markets, saw subdued activity, which tempered the overall national price growth. However, a growing number of markets are witnessing rising prices. The National Composite MLS® HPI remained 3.9% below July 2023, largely due to the price surges seen in the spring and early summer of last year, which 2024 could not match. The CREA expects that year-over-year comparisons will improve going forward.
Rental Market Insights
The Canadian rental market, in July 2024, experienced its sharpest month-over-month increase of the year, with average asking rents for all rental types climbing 0.8% from June. This uptick reversed the previous month’s decline, bringing average rents across the market to just above $2,200.
Purpose-built rentals saw a notable year-over-year rent increase of 8.9%, highlighting their growing popularity among renters. This was a key factor in the overall apartment rent growth of 7.4%. The average rent for condominium unit rentals also rose, but more moderately, with a 1.9% month-over-month increase.
In summary, while July 2024 saw a brief slowdown in home sales, the market still has the potential for a comeback according to the CREA, bolstered by expected rate cuts and pent-up demand. Meanwhile, the rental market continues to heat up, with rising rents driven by strong demand and limited supply, particularly in purpose-built rentals.
