The Canadian Real Estate Association said in a statement that May was another slow month for housing activity.Richard Buchan/The Canadian Press
Canadian homebuyers remained on the sidelines in May despite a small uptick in properties available for sale, but the national real estate association expects activity to pick up this month after the central bank cut interest rates for the first time in four years.
Sales fell 0.6 per cent between April and May after removing seasonal influences, according to the Canadian Real Estate Association, or CREA. And the typical home price across the country declined 0.2 per cent to $714,300 on a seasonally adjusted basis.
Meanwhile, the number of new listings rose 0.5 per cent, pushing the supply of homes for sale to their highest level since the fall of 2019. As of the end of last month, there were 4.4 months of inventory remaining. (That measures the amount of time it would take to sell all the listed properties if the pace of sales remained the same.)
CREA said in a statement that May was another slow month for housing activity, and association chair James Mabey said the Bank of Canada’s early June interest-rate cut to 4.75 per cent from 5 per cent is expected to “bring some pent-up demand back into the market.”
However, that pent-up demand has not yet materialized, realtors say.
“You would think it would encourage people on the fence to jump in,” said Susan Krever, a realtor with Chestnut Park Realty Ltd. who has sold homes in the Toronto region for 18 years. “That didn’t seem to be the case.”
Royal LePage president Phil Soper agreed and said the response was “pretty tepid.” After the June interest-rate cut, he had forecast a material lift in home sales and accelerated home-price appreciation.
Mr. Soper still believes sales will pick up nationwide, but “at this stage, it is looking like a slow drip to higher and higher activity, as opposed to a rush of people.”
It was a slightly different sentiment in the Chilliwack region in British Columbia.
“As soon as interest rates dropped, we noticed a difference,” said Kyle Hislop, a sales representative with Royal LePage Wheeler Cheam Realty. ”A lot of properties that were sitting on the market got offers.”
But Mr. Hislop also said some homeowners are trying to sell their properties because they cannot afford the higher mortgage costs.
Chilliwack was one of the areas in the country where the typical home price nearly doubled during the pandemic’s real estate boom.
For about two years, housing market activity has been subdued. In most cities and regions, sales have been below the 10-year average, and home prices have been falling or stagnant. Calgary, Edmonton and Saskatoon have been the exceptions, with home prices steadily rising over the past year.