Monthly home sales ticked up in August, but housing market activity ‘stuck in holding pattern,’ says CREA

Canadian home sales increased 1.3 per cent on a month-over-month basis in August, though monthly activity was down 2.1 per cent from the same time a year ago, the Canadian Real Estate Association said on Monday.

The association said that a second interest rate cut from the Bank of Canada in late July gave another gentle boost to the housing market, but the bigger picture indicates that people are still waiting on lower rates before they buy homes.

“Despite some fledgling signs of life to kick off the long-awaited monetary policy easing cycle, Canadian housing market activity still looks to be stuck in the same holding pattern it’s been in all year,” said CREA senior economist Shaun Cathcart.

As rates continue to come down, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country,” Cathcart went on.

The number of newly listed properties ticked up 1.1 per cent month-over-month in August.

The national average home price was $649,100 in August, nearly unchanged from the same period a year before.

“Sales volumes remain steady at reasonable levels, new listings are stable and prices are trending flat across most markets,” wrote Bank of Montreal senior economist Robert Kavcic in a note to clients. 

“To this point, the early stage of the Bank of Canada easing cycle has not triggered a rebound in prices or activity, and we suspect that any such bounce remains a few rate cuts away.”