Easing concerns around US tariffs and falling interest rates have ignited renewed interest in the real estate market with the sales numbers rising for two successive months.
With 86% of exports to America remaining duty-free under the current Canada-United States-Mexico Agreement (CUSMA), consumer confidence has rebounded from its March slump.
Consumer spending has remained resilient and that’s been matched in the real estate sector.
For the moment at least, Canadians have put the prospect of a trade war with our southern neighbour behind them.
The number of real estate deals has rebounded for two successive months – up 0.8% and 3.6% in April and May respectively.
They’re still off 4.3% compared with the corresponding period last year, according to the Canadian Real Estate Association (CREA).
However, it reports more homes are coming onto the market – another sign of seller confidence.
Growth in properties for sale was 3.1% higher in May compared with April – a six-year high.
The number of homes on the market is 8% higher than this time last year.
With so many properties hitting the market at the same time, prices have come under pressure as buyers enjoy a greater choice and negotiation leverage.
The national composite MLS Home Price Index shows prices are slightly adrift at 3.5% compared with last year. However, they fell only 0.2% in May compared with April.
The strongest growth markets were in Saskatchewan, Quebec and most of the Atlantic provinces.
Values in Quebec City rose 2.3% in May from April. Halifax (+2.2%), St. John’s (+1.6%) and Saskatoon (+1.5%) also recorded strong monthly gains.
Markets in southern Ontario and British Columbia have not been as strong.
In its market analysis, the Royal Bank of Canada (RBC) said: “We expect housing market confidence to gradually rebuild as tariff de-escalation lifts some of the uncertainty that hindered activity earlier this year. We see this broadly boosting demand, but a weak job market is likely to temper the pace of any recovery in the near term.”
The RBC added that the current market would “keep buyers in the driver’s seat for a while longer in Ontario and British Columbia as supply-demand imbalances persist”.
“It will lead to further price depreciation in these markets, especially in the condominium segment where supply is abundant.”