Canadian Home Sales Fall Back in August
Statistics released today by the Canadian Real Estate Association (CREA) show national home sales were down on a month-over-month basis in August 2023.
- National home sales declined 4.1% month-over-month in August.
- Actual (not seasonally adjusted) monthly activity came in 5.3% above August 2022.
- The number of newly listed properties edged up 0.8% month-over-month.
- The MLS® Home Price Index (HPI) climbed 0.4% month-over-month and was also up 0.4% year-over-year.
- The actual (not seasonally adjusted) national average sale price posted a 2.1% year-over-year increase in August.
Home sales recorded over Canadian MLS® Systems posted a 4.1% decline between July and August 2023.
The national sales figure was pulled lower in August by declines in Greater Vancouver and the Fraser Valley, Montreal, Ottawa, Hamilton-Burlington as well as London and St. Thomas.
The actual (not seasonally adjusted) number of transactions came in 5.3% above August 2022.
"With sales slowing and new listings returning to more normal levels, demand and supply are continuing to come into better balance" said Larry Cerqua, Chair of CREA. "This is giving buyers more time and more choice. If you're looking for information and guidance about how to buy or sell a property this fall, contact a REALTOR® in your area," continued Cerqua.
"August was the first full month of housing data following the Bank of Canada's July rate hike, so a dip in activity was expected," said Shaun Cathcart, CREA's Senior Economist. "The demand is obviously still there, and it will be back, but as the housing affordability crisis re-emerges as a top policy issue, for now, the slowdown on the buyer side should help keep a lid on prices."
The number of newly listed homes edged up 0.8% on a month-over-month basis in August, a small increase following a cumulative gain of more than 24% between March and July. New listings started off 2023 at a 20-year low but are now closer to average levels.
With sales falling and new listings edging up in August, the sales-to-new listings ratio eased to 56.2% compared to 59% in July and a peak of 67.4% in April. The measure is now back in line with its long-term average of 55.2%.
There were 3.4 months of inventory on a national basis at the end of August 2023, up from 3.2 months in July. While the measure is up a bit from its recent low of 3.1 months in May and June, it remains below the second half of 2022 and well below its long-term average of about five months.
The Aggregate Composite MLS® Home Price Index (HPI) edged up 0.4% on a month-over-month basis in August 2023— only about half as large as the July gain, which was only about half as large as the gains recorded in April, May, and June. This levelling off of prices is in line with slowing sales and a rebound in listings.
While prices are stabilizing at the national level, regional differences are re-emerging. Price growth has remained solid in Quebec and the East Coast, followed by British Columbia and the Prairies. Ontario is now a mixed bag, still with some of the bigger increases but also some of the bigger declines.
As of August 2023, the Aggregate Composite MLS® HPI was up 0.4% on a year-over-year basis. This was the first year-over-year increase since September 2022. Even though prices appear to be levelling out near current levels, year-over-year comparisons will likely continue to rise in the months ahead because of how prices continued to decline through the second half of 2022.
The actual (not seasonally adjusted) national average home price was $650,140 in August 2023, up 2.1% from August 2022.
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