Confidence is returning to the Canadian real estate market with resales tracking 2.8% higher in June and values stable, just 0.2% lower.
It’s the third successive month that we’ve seen resale data move upward, indicating that Canadians have put aside previous concerns about the economy, job security and the furore over American tariffs.
All three issues are considered to have put a handbrake on the real estate market in the first half of the year.
The latest MLS Home Price data indicates we’re moving to a two-speed market in which price growth and tight supply are prevalent in Quebec, the Prairies and Atlantic Canada, while economic problems and high inventory blight Ontario and British Columbia.
The underperformance of B.C. and Ontario has dragged the national market into a negative value average for a seventh consecutive month.
However, improved affordability has encouraged more buyers to strike deals. The positive, three-month trend in this data point is the first real signal of the market beginning to return to a more buoyant period.
The Canadian Real Estate Association says home sales have not only improved month-over-month by 2.8% but are also 3.5% higher than a year ago.
It reported monthly gains in sales volume in Toronto (8.1%), Edmonton (3%), Vancouver (2.8%) and Montreal (1.8%). These centres continue to offer a rare opportunity for value-based buying before the market regains momentum.
The increase in the number of sales has not yet translated into a turnaround in values for some of these cities. For example, values fell month-over-month in Toronto (-0.9%) mainly due to an oversupply of available properties.
Yearly trends are far stronger in Quebec City (16.4%), St. John’s (12.3%), Winnipeg (7.5%), Montreal (7.3%) and Saskatoon (7.3%).
The Royal Bank of Canada said in its monthly analysis that it expected the housing market to “sustain its gradual resales recovery as confidence returns and interest rate cuts continue to have an impact”.
Its written analysis added: “We see little that would alter the diverging price trends in the near term. High inventory, affordability issues and soft labour markets are likely to prolong weaker home prices in Ontario and B.C.
“The persistence of tight supply-demand conditions is poised to drive further price gains in the Prairies, Quebec and Atlantic Canada – albeit at a slower pace in some areas.”