Reference to the CFA’s Advocacy Update from August 18, 2022

The Canadian Real Estate Association found home sales fell for the fifth consecutive month between June and July.

On a seasonally adjusted basis, the association said sales in July fell 5.3 per cent compared with June. The actual number of sales last month was 37,975, down 29 per cent compared with July last year. “That leaves activity back in the pre-COVID range, or roughly 40 per cent below the peak of the demand-side blowout seen last year,” said Robert Kavcic, BMO Capital Markets senior economist, in a note to analysts.

“Unadjusted, it was the quietest July for sales since the financial crisis in 2020.” July’s drop in month-over-month sales was the smallest of the past five months. Market watchers said it’s too soon to say whether that trend will continue.

Much of the cooldown has been attributed to the Bank of Canada increasing its key interest rate by one percentage point to 2.5 per cent in July in the largest hike the country has seen in 24 years. As the rates have risen and sales plummeted, many buyers have sat on sidelines, predicting better deals will come in the fall and frustrating sellers, who have had to come to terms with the fact that they likely won’t fetch as much as neighbours who sold in the winter.

Few listings in July totalled 73,436, down six per cent from last July and on a seasonally adjusted basis, down five per cent from June.

The average sales price was $629,971, down five per cent from $662,924 last July and on a seasonally adjusted basis amounted to $650,760, a three per cent drop from June, CREA said.

Excluding the typically heated Greater Vancouver and Toronto Areas from the calculation cuts $104,000 from the national average price. Southwestern Ontario is feeling it hardest, with markets like Kitchener-Waterloo and London down roughly 15 per cent from their high already.

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