Canadian Existing-Home Sales Decline in August

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Canadian existing-home sales experienced a 4.1% drop in August compared to the previous month, a reflection of the market’s response to the Bank of Canada’s rate hike in July. Concerns regarding the pace of inflation prompted the central bank to raise rates to their highest level in 22 years at 5.0%.

Although there was a slowdown in activity following the rate increase, Shaun Cathcart, an economist at the Canadian Real Estate Association, reassures that the demand for homes remains strong. The dip in buyer activity is expected to help stabilize prices.

According to data from the association, transactions in August were 5.3% higher than the same period last year. The benchmark house prices also witnessed a modest increase of 0.4% from July, marking a 0.3% rise compared to the previous year. This indicates the first annual price growth since September 2022.

The sales-to-new listings gauge, which indicates market conditions, decreased to 56.2% in August from 59% in the previous month. This decline comes down from its peak of 67.4% in April, suggesting a shift towards a buyer’s market.

Overall, Canadian existing-home sales may have faced a temporary setback, but the persistent demand and controlled prices offer a promising outlook for the housing market.

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