Posthaste: Sellers return to Canada's housing market just as buyers go missing
Good morning,
Sellers are returning to Canada’s housing market — in some cases, in droves.
New listings were up 5.6 per cent in July from the month before, an increase of 24 per cent since April, reversing declines earlier this year, said RBC economists Robert Hogue and Rachel Battaglia.
Though it won’t become clear for a few months whether the surge is investors timing the markets or homeowners selling to escape higher mortgage costs, the jump is the fastest rise in new listings outside of the pandemic and suggests a shift in sentiment, said Desjardins economist Marc Desormeaux.
The increase in some markets was striking. Listings were up more than 28 per cent in Saguenay, Que., 21 per cent in Kitchener-Waterloo and almost 20 per cent in London, Ont., though RBC points out the increases are coming from exceptionally low levels.
At the same time buyers are pulling back from the market.
Home sales slipped 0.7 per cent nationwide in July from the month before, the first decline in six months as the Bank of Canada’s resumption of rate hikes put a lid on the housing market’s spring rebound.
With the average five-year fixed mortgage rate at a post-financial crisis high of 5.84 per cent, potential home buyers are holding back, said Capital Economics. The average variable rate is at almost 7 per cent.
Not all markets saw declines. While sales fell 11 per cent in the Fraser Valley, B.C. and 8.7 per cent in Toronto, they increased in Ontario’s more affordable markets such as London, Niagara and Windsor, said RBC. Sales also rose in Quebec, the prairie provinces and parts of Atlantic Canada.
However, in British Columbia and Ontario the tight supply-demand conditions seen in the spring are unwinding quickly, said the economists.
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