Canada's red-hot housing market is showing its first signs of cooling after months of steady growth, according to the latest data from the Canadian Real Estate Association (CREA). National home sales dipped 1.9% month-over-month in June, marking the end of a four-month upward trajectory that had characterized the spring market.
Market Momentum Shifts After Spring Surge
The recent decline comes as somewhat of a surprise to industry watchers who had witnessed consistent growth since February. While the month-over-month numbers tell one story, the year-over-year perspective reveals a more complex picture. Actual sales activity actually increased 4.7% compared to June 2023, demonstrating that the market remains active despite the recent slowdown.
"The momentum that was building in the spring housing market appears to have stalled," acknowledged CREA's senior economist, Shaun Cathcart. "While some might have expected the Bank of Canada's June rate cut to fuel further growth, it seems many buyers decided to wait for more substantial rate relief before making their move."
Regional Variations Paint Diverse Picture
The national numbers mask significant regional differences across Canadian markets:
- Greater Vancouver and the Fraser Valley saw modest increases in sales activity
- Calgary and Edmonton markets remained relatively stable
- Regina, Saskatoon, and markets in Ontario experienced more noticeable declines
- Quebec markets showed mixed results with Montreal down but Quebec City up
Price Trends and Market Balance
The Aggregate Composite MLS® Home Price Index (HPI) edged up 0.3% month-over-month in June, sitting just 0.4% below year-ago levels. The national average home price reached $694,000, a 2.8% increase from June 2023, though this figure is heavily influenced by high-priced markets in British Columbia and Ontario.
Market balance also shifted slightly, with the national sales-to-new-listings ratio tightening to 55.6% in June compared to 58% in May. There were 4.4 months of inventory on a national basis at the end of June, up from 4.1 months at the end of May.
What's Next for Canadian Homebuyers?
With the Bank of Canada expected to continue gradual rate cuts through the remainder of 2024, many potential buyers remain in a holding pattern. "The question moving forward is how many more buyers will come off the sidelines with further rate cuts," Cathcart noted. "The timing of those cuts and their magnitude will likely determine whether we see another surge in activity or a more gradual return to balanced market conditions."
As summer progresses, all eyes will be on whether this month's decline represents a temporary pause or the beginning of a more sustained cooling period for Canadian real estate.
