The Bank of Canada’s rate hike in June and the possibility of another increase in July have generated mixed reactions across local housing markets in Canada. While some markets experienced a decline in buyer activity, others remained resilient. The rapid price gains observed in Toronto, Vancouver, and other parts of Ontario and British Columbia may have contributed to buyer hesitation.
Despite the rate hike, the supply of homes for sale continues to rise in major markets across Canada. This increase in supply has not yet eased the upward pressure on prices, but if sustained, it is expected to slow down the pace of property appreciation in the coming months. The speed at which markets rebounded this spring, particularly in Toronto and Vancouver, has been surprising. However, recent buyer retreats may indicate a more measured future trajectory for these markets.
The rebound in activity witnessed this spring lost momentum in June, with a 6.9% month-over-month decline in home resales. Although more properties became available for sale, the rebalancing of demand-supply conditions suggests a slower pace of appreciation in the future. Higher interest rates are likely to continue making homeownership affordability challenging for buyers. Upward momentum has been building in Montreal, with estimated home resales increasing approximately 11% month-over-month in June. The solid growth in supply and demand has kept price pressure relatively muted. While some appreciation is anticipated, it is expected to occur gradually. The Montreal market remains soft, with resales still below pre-pandemic levels.
In June, an increase in sellers brought supply into better alignment with demand. New listings rose for a third consecutive month, while purchase transactions remained relatively stable. The recent interest rate hike and price upturn might be starting to affect buyer sentiment. Property values continued to rise, but buyers are expected to push back on further price appreciation due to ongoing housing affordability challenges. In the Calgary area, eager buyers have quickly absorbed the expanding supply. Home resales jumped approximately 9% month-over-month in June, following a solid increase in May. The market remains heavily tilted in favor of sellers, contributing to an accelerating rate of price growth. Calgary’s population growth and relative affordability compared to other major Canadian cities are expected to sustain this trend in the coming months.
The impact of the Bank of Canada’s rate hike varies across local housing markets in Canada. While some markets experienced a decline in buyer activity, others continued to demonstrate resilience. Growing supply provides hope for a potential slowdown in property appreciation, but challenges related to housing affordability persist. Monitoring market dynamics and seeking professional guidance will be crucial for investors and homebuyers navigating the evolving landscape of Canadian real estate.
Source: https://thoughtleadership.rbc.com/housing-market-momentum-diverges-across-canada/
Since before the Budget Day on April 16, Prime Minister Justin Trudeau has been making announcements addressing the housing crisis facing the North American nation. From incentivizing the construction of affordable housing to reconstruction, these plans promise to improve the housing infrastructure of Canada.
The real estate sector’s most influential leaders and innovators will be gathering in Calgary for a conference that, in all probability, is going to be the biggest real estate event in Alberta. Titled, ‘Rock’N REAL ESTATE 2024’, the BUZZ conference will be taking place in Carriage House Hotel & Conference Centre on Thursday, May 2. The meeting will open at 7:30 am with a light continental breakfast. The discussion will go from 8 am to 5 pm followed by an hour of networking session at the end of the event. Cocktails on the house!
Canadian housing activity was largely stable in March, but a key spring selling season lies ahead. Existing homesales edged up 0.5% in March (seasonally adjusted) and were up a modest 1.7% from sluggish year-ago levels (although an early Easter long weekend likely reduced volumes somewhat). While current activity might seem quiet compared to the exuberance in 2021 and early 2022, sales volumes are trending about in line with pre-COVID norms, albeit at the low end of that range.
“We are changing the way we build homes in Canada. In our housing plan and Budget 2024, we are delivering ambitious action and investments to build more homes, make it easier to rent or own, and help the most vulnerable with stable housing. This is about restoring fairness for every generation, and housing is at the heart of that”, said Canadian Prime Minister, Justin Trudeau about the country’s new housing plan.
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