Property sales are on the rise across Canada, jumping another 1.1% month-over-month in August, according to the Canadian Real Estate Association (CREA).
Buyer sentiment is picking up in Montreal, Greater Vancouver and Ottawa, giving Canada its best market performance in August for four years.
Deal numbers have now increased for a fifth straight month, signalling a 12.5% improvement on the number of transactions finalised last March.
The city that had previously driven the sales recovery, Greater Toronto Area (GTA), had a flat August.
The Royal Bank of Canada (RBC) cautiously welcomed the latest data, pointing out the August result was down on the previous three months.
Almost 200,000 properties were listed for sale on all Canadian MLS systems at the end of August, up 8.8% from a year earlier.
The national average price is $664,078, up 1.8% on 12 months ago.
CREA’s Senior Economist, Shaun Cathcart, said he expected the trend for higher deal numbers to accelerate during fall.
“Activity has continued to gradually pick up steam over the last five months, but the experience from a year ago suggests that trend could accelerate this fall,” he said.
“If last year is any kind of guide, there is the potential that sales could really pick up in the next month.”
He predicted another rate cut by the Bank of Canada (BoC) would encourage even greater buyer participation.
The BoC duly responded, halving the overnight rate from its May 2024 peak. It handed down an eighth reduction in 17 months to take the benchmark to 2.5% – one of the lowest among mature global economies.
In another sign of the market’s sustainable recovery, the number of newly-listed properties climbed 2.6% in August compared to July.
The MLS Home Price Index stayed steady for August compared with July, but it’s adrift 3.4% on a year-over-year basis.
CREA chairperson Valérie Paquin said: “Now we are on the other side of Labour Day, new listings are flooding onto the market. If you’re looking to sell a property this fall, or are hoping to purchase one, reach out to a realtor in your area today.”
So, how should you respond if you’re considering selling your home to either upsize or downsize in the next few months? Here are some thoughts from our team:
Time the listing – CREA’s senior economist explicitly expects the trend of increasing sales to “accelerate this fall”. Don’t wait for prices to jump. List as soon as possible to capture the surge in buyer activity before the market becomes saturated with a “flood” of new listings.
Price competitively – While buyer activity is increasing, the number of newly-listed properties is also climbing (+2.6%) as sellers race to market. To prevent your property from getting lost, price strategically to sell faster than your neighbours and capitalise on the rising sales volume before the market has fully absorbed the increased supply.
Low mortgage rate – The BoC’s decision to cut the overnight rate to 2.5% is a major catalyst, as it encourages greater buyer participation. Work with a realtor to highlight the current climate of improved purchasing power. Position your property as a prime opportunity given the low borrowing costs. I’d be happy to help you.
Don’t over-price – The emerging market strength is in the volume of deals being made, not rapid price inflation. Your strategic goal should be to secure a quick, firm transaction rather than hold out for a few extra dollars.
Closing terms – To help seal any deal, it’s a good idea to accept a closing date that suits the buyer’s needs (especially if they’re upsizing or downsizing) and consider negotiating to accept fewer contingencies as a tradeoff.