Data Reveals Decrease In Canadian Housing Market Activity
New data suggests that Canada’s fiery housing market might be finally cooling off.
The Canadian Real Estate Association (CREA) released its set of monthly statistics for May 2021 on June 15. The data shows that national home sales have continued a downward trend, dropping 7.4 percent from April to May.
Meanwhile, the number of new property listings across Canada has also dropped by 6.4 percent from April to May. This is the fourth month in a row that the ratio of sales to new property listings has dropped.
The news follows months of concern regarding Canada’s heated housing market. For months, demand for housing has gone far above the supply, leading to higher home costs and unmanageable mortgage rates. Experts have warned that Canada could be facing an overheated market this summer.
CREA’s latest data is reassuring for those concerned about overheating. The 7.4 percent decline in sales follows the 11 percent decline from March to April, and suggests that the market is ready to cool down.
“While housing markets across Canada remain very active, we now have two months of moderating activity in the books, and that goes for demand, supply and prices,” said CREA chair Cliff Stevenson. “More and more, there is anecdotal evidence of offer fatigue and frustration among buyers, and the urgency to lock down a place to ride out COVID-19 would also be expected to fade at this point given where we are with the pandemic.
CRA’s Senior Economist Shawn Cathcart added that, “with the synchronous cooling off of demand, supply and prices in recent months, one could draw comparisons to last year’s initial lockdowns, but this year feels different.”
Cathcart explains that the housing market initially came to a halt following the beginning of the COVID-19 pandemic in March 2021 – though it eventually picked up, demonstrating patterns that did not reflect what would normally be seen in a typical year.
“The slowdown in the market was coincident not just with record COVID-19 cases and fresh lockdowns but with the take up in the vaccination rate, so maybe we all finally have something else to think about other than housing and being stuck at home all the time,” he added. “Going forward, there is still a good probability of increased churn in resale markets as we get more certainty around our post-COVID lives and people move around more than they would have in a non-COVID world. But for now at least, with the light at the end of the tunnel so close, it feels like housing may take a back seat to us all starting to get our lives back to normal this summer