June Market Update: Canadian home sales edged down 1.7% between March and April, a second monthly decrease in five months.
On a provincial level, decreases were recorded in April in Nova Scotia (-6.3%), Alberta (-4.5%), Manitoba (-4.1%), Ontario (-2.9%), Quebec (-1.3%), P.E.I. (-0.6%), and B.C. (- 0.5%). On the other hand, increases were observed in New Brunswick (+12.7%), Saskatchewan (+11.5%), and Newfoundland (+4.4%).
In the months ahead, strong demographic growth, low vacancy rates in the rental market and the openness for modest interest rate cuts by the Bank of Canada could help to support transaction levels. Although uncertainty remains in the form of a potential further cooling in the labour market and affordability conditions, there is cautious optimism about the magnitude of a possible rebound in the housing market going forward.
On the supply side, new listings increased 2.8% from March to April, the third advance in four months. This recent rise in listings might be explained by renewed confidence among sellers that they will be able to conclude a transaction in current market conditions. However, it could also be due to growing financial distress among some owners, forcing them to list their property for sale. While this latter phenomenon remains marginal for the time being, it will be one to watch in the months ahead, as the Canadian economy is expected to continue cooling. Another indicator that can be linked to the two preceding explanations is that the proportion of listings canceled during the month has continued to fall in recent months.
Overall, active listings jumped 5.8% in April, following stabilization in the previous month. Overall, the number of months of inventory (active listings-to-sales) increased from 3.9 in March to 4.2 in April. As a result, market conditions loosened during the month but remained tighter than their historical average in most provinces. They were balanced in Manitoba and B.C., and softer than average in Ontario.
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