An up-swing in June home sales was not enough to avoid a pull back in the Canadian Real Estate Association’s latest forecast.
June saw a 3.7% increase in sales activity compared to April. On a year-over-year basis, though, sales dropped 9.4%. The national average home price dipped 1.6% from a year ago, to $696,000.
Sellers, Not Buyers
While the buyers are staying away, sellers are back. New listings rose 1.5% from May. As of the end of June there were about 180,000 properties listed for sale, up 26% from a year earlier.
CREA Pulls Back
Those inventory numbers combined with a less-aggressive-than-expected rate-cutting cycle by the Bank of Canada has CREA dialling back is forecast for the rest of this year and 2025.
CREA’s Short Report
In its very abbreviated July forecast CREA predicts 472,000 residential properties will trade hands in 2024, a 6.1% increase from 2023. That’s down from a 10.5% increase (490,000 units) forecast at the end of the first quarter. The national average home price will climb 2.5% to $694,400 this year. The April forecast had called for a 4.9% increase to $710,500.
The Longer View
For 2025 the Realtors predict a 6.2% sales increase to 502,000 units with a national average price increase of 5.0% to $729,000. The April forecast called for 7.8% more sales (534,500 units) and a 7.0% price increase to $760,000.
Interest Rates Remain Key
There are notions that the Bank of Canada’s quarter-point, June rate cut may have coaxed a few more buyers back into the market, but most analysts say the rate will have to drop by a full percentage point to generate any real increase in activity.