Canadian real estate saw the fewest home sales in over a year, as the market continues to cool. Canadian Real Estate Association (CREA) data shows existing-home sales fell in August. Despite falling, the month printed the second biggest number ever. Sales are also still much higher than normal. That said, it was a very sharp decline, and they keep coming — meaning things can change fast.
Canadian Existing-Home Sales Are 14% Lower Than Last Year
Canadian home sales tapered once again, with the lowest number since last summer. Seasonally adjusted home sales fell to 48,379 units in August, down 0.5% from the previous month. Unadjusted sales are down 14% from the same month last year. It was the fewest number of homes sold in over a year.
Canadian Real Estate Sales
Seasonally adjusted existing-home sales for all types, as reported through the Canadian MLS.
Source: CREA; Better Dwelling.
Canadian Existing-Home Sales Are Still 15% Above Average
Annual growth showed smaller declines, but a sharp drop in sales volume. The 14% annual drop for unadjusted sales was a little lower than the 15.1% seen a month before. The volume of sales is still tapering towards more historic levels, but has 15% more to go. It might seem like a lot, but sales fell that much in the two months after the peak was reached. When the market changes its mind, it can hit like a freight train.
Canadian Real Estate Sales Change
The annual percent change in the unadjusted number for existing-home sales completed through the MLS.
Source: CREA; Better Dwelling.
Supply Isn’t Throttling Sales, It’s Actually Improving
The common narrative is a lack of inventory is behind the decline, which sounds like it makes sense. People can’t buy inventory that isn’t there, right? The problem is that’s not what the data is showing, according to the industry. CREA reported 66,830 seasonally adjusted new listings in August, up 1.2% from a month before. That’s growth, compared to the decline in home sales.
Even markets making headlines for low inventory aren’t as low as implied. For example, Greater Toronto’s new listings saw a monthly decline of 1.8% in August. Contrast that to a drop of 2.7% for home sales over the same period. In Vancouver, new listings jumped 12.7% and sales fell 0.5% over the same timeline. When adjusted for seasonal demand, the market is actually better supplied.
The last month was neither a boom or bust, but a fairly boring and routine cooling. It was the second biggest August on record, but also home sales made a 14% decline. There are fewer sales than last year, but they’re also way above average. It’s a mixed read, but those lack of sales are definitely going to be a drag on GDP-spin off activity.
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The supply is definitely an issue.
The mls numbers are not entirely accurate due to duplicate listings especially in the Halton/Peel/Toronto area with some trickle effect into the the areas east and west.
Whe there 16 offers on a home and only 3 similar properties in an area eve size of Mississauga you’re 13 properties shy of balanced. Not to mention most buyers are seeking high quality if they are paying a premium.
Google me to get help if you’re looking to buy or sell!
Lets be real here, the whole world printed tons of money in the last two years not just Canada. Its irresponsible to tell people who can still buy now to wait. We all know with inflation and money printing asset prices are going to go higher. We can implement policies, but most wont do anything. The only policy that will work is taxing multiple residential properties owners.
Let’s be real with your agenda, you post the same comment on every article.
House prices have already inflated 30% following that massive money printing. That’s history, and not an argument to expect another 30% inflation from here. Did you read the article? The market is currently cooling….
Housing was grossly overpriced pre-pandemic, and any major economic shock could cause an asset collapse even in an environment of high inflation.
It will also be important to frame things in so-called “real” values, not nominal values. In one year if housing loses 5% of it’s value, and inflation is 5%, you’ve effectively “lost” 10% in real terms. Price to income is the real metric to watch, if inflation is permanent it will start moving the needle on wages.
Minimum wage increased already in Ontario, by 10 cents.
To cover massive inflation for people buying houses.
10 dents is 0.70%, whereas inflation is at 4% (though realisticay housing which is the largest allocation of debt is more like 40%).
Minimum wagez or anything matching the CPI is not going to cut it. 💀
An economy based on real estate, based around indebting locals and getting rich foreigners to stash their cash here, instead of their native country never lasts long. Human capital in Canada is truly abysmal. No native industries to speak of that can compete with other countries. Many Canadians truly have nothing going for them except real estate.
Like the real estate agents and landlords say “It’s transitory” wooooooo it’s coming.
You don’t have to tax people with multiple properties. All they have to do is put the interest back to where it was which will take purchasing power away. Taxing people ain’t going to solve anything, all it’s going to do is make people either charge more for rents or charge more for the house when they sell. Other than that absolutely nothing. Just raise the interest rates. That’s all folks!
Make property taxes 2% annual of house value. For two million house you have to pay 40.000 annual in taxes. One million, average house, 20.000 annual. Also on matrimonial home, if you sell it within two years, you have to pay regular taxes additional income to you salary.
Like our neighbor down south.
How exactly does taking away purchasing power from home buyers already struggling with affordability help them?
Once purchasing power is taking away and delusional purchasers stop buying massively two sometimes even three houses in order to move from one house to another and speculate.
Market is going to cool down and prices are going to go down with higher and stricter taxation system.
We have a situation where everyone is speculating from minimum wage income people with very questionable mortgage approvals to our government authorities.
I have three houses and planning to move from one to another in order to sell them all one day not paying any taxes. It’s legal in out country.
Sellers holding out for those great offers. They believe the time is on their side.