Meanwhile, recreational homes in Canada could see strong price rise
Canada’s largest housing market saw a slower pace of sales in April compared to a year earlier, despite buyers being offered more choice.
New figures from the Toronto Regional Real Estate Board show that there were 7,114 sales through its MLS system last month, down 5% year-over-year. New listings surged 47.2% in that period. Month-over-month, sales were down and listings were up on a seasonally adjusted basis.
It comes as a recent BMO poll reveals that new homebuyers will stay on the sidelines until the BoC cuts rates.
The MLS Home Price Index Composite benchmark was down by less than 1% year-over-year, while the average selling price was up 0.3% to $1,156,167. Seasonally adjusted monthly stats show a gain of 0.4% for the HPI and 1.5% for the average selling price.
“Listings were up markedly in April in comparison to last year and last month. Many homeowners are anticipating an increase in demand for ownership housing as we move through the spring. While sales are expected to pick up, many would-be home buyers are likely waiting for the Bank of Canada to actually begin cutting its policy rate before purchasing a home,” said TRREB President Jennifer Pearce.
Tighter market conditions are expected in the months ahead, assuming the BoC begins cutting interest rates to ease borrowing costs for homebuyers. A report from the Canadian Real Estate Association expects a rebound for the market is coming.
Recreational market
A separate report focusing on Canada’s recreational housing market calls for strong price appreciation during 2024.
RE/MAX Canada’s 2024 Cottage Trends Report suggests a 6.8% increase for this section of the housing market, with supply remaining tight. Almost two thirds of cottage owners have decided not to list their homes this year, the report found, although sales are expected to rise in most regions.
"Even the change to the capital gains tax, that will take effect on June 25, won't spark a wide-spread flood of new listings and sales by cottage owners trying to get in under the wire given the narrow window," said Christopher Alexander, President, RE/MAX Canada. "That said, RE/MAX brokers and agents in some regions have reported a recent uptick in listings that may be tied to the new change, it could also prompt some Canadians to have estate planning discussions earlier, so work with an experienced, local real estate agent, who can advise you of current conditions in your given market."
There has been a shift in demographics noted by the firm’s agents and brokers with families and young couples now a significant driver of the market that was once dominated by retirees. Lifestyle choices made by younger Canadians since the pandemic has exacerbated the shift with younger buyers likely to spend more of their time at their secondary properties.
