Market watchers across the country are talking about a real estate recovery. Much of the optimism is based on sales and pricing results over the past two months.
The June figures from the Canadian Real Estate Association show a 2.8% increase in sales compared to May, which recorded a 3.5% increase over April. On a year-over-year basis sales are up 3.5% compared to June of 2024. The improvements have been driven by transactions in the Greater Toronto Area which have jumped more than 17% since April, but still remain at historical lows.
The market domination of the GTA may help to explain why prices continue to ease. The national average price for June came in at $692,000, a 1.3% decrease from a year earlier. CREA’s proprietary ‘Home Price Index’ showed a 3.7% decline from June of 2024.
New listings fell 2.9% between May and June, but are still 11.4% higher than they were a year earlier. The sales-to-new listings ratio has tightened-up a little but is, slightly, tilted in favour of buyers. The June ratio stands at 50.1% compared to 47.3% in May. CREA considers anything between 45% and 65% to be a balanced market.
Many market watchers are hopeful the rebound will continue through autumn, but analysts say that will likely depend on interest rates. Expectations for further cuts by the Bank of Canada have diminished in recent weeks. The experts are now looking to October before there is another rate cut. They cite June’s good employment report and persistently “stickie” core inflation. Interest costs on fixed-rate mortgages have been creeping up, based on economic news that is bolstering the yields on Canada and U.S. government bonds.