Annual consumer prices are continuing to fall, and that’s good news for property buyers and sellers hoping to see a cut in interest rates in the near future.
Statistics Canada says the April annual inflation reading was 2.7%, down from 2.9% in March.
A 1.4% drop in food prices helped achieve this positive result. However, the Financial Stress Index from FP Canada gave us sobering news: 44% of Canadians say financial worries are their leading cause of stress.
Housing costs (52%) and food prices (69%) were the two biggest contributing factors to our national stress, according to the report. (Our food prices have risen 21% in three years.)
In more good news for the property market, figures from the Canadian Real Estate Association (CREA) reveal a significant increase in new property listings.
This should help address the imbalance between demand and supply. The key findings from the CREA update for April include:
- Increased Inventory: The influx of new listings brought the available inventory to pre-pandemic levels, easing supply-demand pressure.
- Subdued Buyer Activity: Despite the increased inventory, budget-constrained buyers remain on the sidelines, waiting for interest rate cuts.
- Flat Prices: Home prices remained flat. April was the third consecutive month of unchanged price growth.
- Regional Variations: Sales activity declined in most major Canadian markets, with the exception of Saskatchewan, New Brunswick, and Newfoundland.
- Seller Activity: Sellers were particularly active in British Columbia and Ontario.
- Toronto: The city experienced a gradual price recovery with the MLS Home Price Index posting a third consecutive increase.
The latest CREA data suggests a potential turning point for the market, as the increased supply will ease buyer competition. However, the market remains sensitive to affordability concerns.