OTTAWA – The pace of home sales in Canada slowed in June as transactions in the country’s hottest markets slipped, despite remaining up 5.2 per cent compared with a year ago.
The Canadian Real Estate Association said Friday sales through its multiple listing service fell 0.9 per cent from May to June, as about half of the markets it tracks — including Greater Vancouver, the Fraser Valley in B.C. and Greater Toronto — softened.
Royal Bank senior economist Robert Hogue noted it was the second straight drop in monthly sales following a record high set in April.
“What makes this a positive development is the fact that the easing in activity was led by Canada’s hottest markets,” Hogue said.
Greater Vancouver reported a 5.3 per cent drop for June, while Greater Toronto fell 1.2 per cent.
“The slowdown in activity may be evidence that stretched affordability has begun to exert a greater restraining effect on homebuyer demand,” Hogue suggested.
“In British Columbia it may also be evidence a drop in speculative buying activity, ahead of upcoming regulatory changes in the province and the City of Vancouver.”
The B.C. government recently said it would support Vancouver’s request for a tax on vacant housing. The city hopes the plan will create an incentive for owners to rent vacant properties.
The drop in sales in June came as the number of newly-listed homes increased 2.2 per cent compared with May and the national sales-to-new listings ratio slipped to 63.3 per cent from 65.3 per cent in May.
CREA says a sales-to-new listings ratio between 40 per cent and 60 per cent suggests a balanced housing market, with readings below and above this range indicating buyers’ and sellers’ markets, respectively.
Despite the drop in sales in June, Bank of Montreal chief economist Doug Porter wasn’t swayed, citing staggering year-to-date increases on both prices and sales.
“Each were up by double-digits in the first half of the year,” Porter said.
“In other words, it’s business as usual in Canada’s housing market, with fire-breathing strength in Toronto and Vancouver, corrections playing out in the oil-exposed markets, while most others fall somewhere in between.”
The national average price of a home sold in June was $503,301, up 11.2 per cent from a year ago. Excluding Greater Vancouver and Toronto, the average price was $374,760, up 8.4 per cent from the same month last year.
The aggregate composite MLS benchmark price was $564,700 in June, up 13.6 per cent from a year ago.