Some Ontario markets buck the trend as momentum pauses slightly across Canada

While there were early signs of renewed momentum in June following the Bank of Canada’s first interest rate cut since 2020, activity in Canada’s housing market paused slightly in July. Some areas in Ontario, however, bucked the trend and showed signs of growth, according to the Canadian Real Estate Association.

Home sales activity recorded over Canadian MLS Systems edged back by 0.7 per cent on a month-over-month basis in July 2024, giving back a small portion of June’s post-first rate cut gain.

Market rekindling

On Sept. 4, the BoC announced its third consecutive rate cut, "with markets now anticipating rate cuts at every remaining Bank of Canada decision this year,” says Shaun Cathcart, CREA’s senior economist. “Combine that with a record amount of demand waiting in the wings, and the forecast for a rekindling of Canadian housing activity going into 2025 has just gone from a layup to a slam dunk.”

Monthly changes in sales activity were generally small amongst the larger centres in July. Declines in Calgary and the Greater Toronto Area were mostly offset by gains in Edmonton and Hamilton-Burlington.

“While it wasn’t apparent in the July housing data from across Canada, the stage is increasingly being set for the return of a more active housing market,” says James Mabey, chair of CREA. “At this point, many markets have a healthier amount of choice for buyers than has been the case in recent years, but the days of the slower and more relaxed house hunting experience may be somewhat numbered.”

Prices on the rise

The National Composite MLS Home Price Index (HPI) edged up 0.2 per cent from June to July. While a small increase, it was slightly larger than the June increase, making it just the second, and the largest, gain in the last year.

While prices were up slightly at the national level, they were held back by reduced activity in the largest and most expensive British Columbia and Ontario markets. Regionally, prices are rising in a growing number of markets – a majority at this point.

The non-seasonally adjusted National Composite MLS HPI stood 3.9 per cent below July 2023. This mostly reflects how prices took off last April, May, June and July – something that was not repeated over that same period in 2024. It’s mostly likely that year-over-year comparisons will improve from this point on, CREA says.

The actual (not seasonally adjusted) national average home price was $667,317 in July 2024, almost unchanged (-0.2 per cent) from July 2023.