Canada’s housing market could wake up after a quiet month in May, says the Canadian Real Estate Association in its latest monthly housing report.

CREA expects the Bank of Canada’s recent interest-rate reduction to impact the market in the near future. The realtors group’s findings have broad implications for the Canadian condominium market as well as the single-family sales sector.

“May was another sleepy month for housing activity in Canada, although it may prove to be the last of those now that interest rates have moved lower,” said Shaun Cathcart, CREA’s senior economist.

“The Bank of Canada’s June 5 rate cut may have only been 25 basis points, but the psychological effect for many who have been sitting on the sidelines was, no doubt, huge. The question now turns to further rate cuts – specifically, how fast, and how far?”

Home sales dipped 0.6% on a seasonally-adjusted basis between April and May, but actual home sales fell 5.9% year-over-year.

Meanwhile, prices are mostly sliding sideways across the country. However, Calgary, Saskatoon and Edmonton remain exceptions as prices steadily tick higher, continuing a trend that started at the beginning of 2023.

The Multiple Listing Service home price index was down 0.2% month-over-month and 2.4% since May 2023. The actual, not seasonally-adjusted, national average sale price rose 4% year-over-year.

New listings increased marginally (0.5%) month-over-month, resulting in more homes for sale in most markets. At the end of May, about 175,000 homes were listed for sale. That figured represented a 28.4% year-over-year increase but remained below historical averages.

“The spring housing market usually starts before all the snow has melted, somewhere around the beginning of April, but this year I believe a lot of people were waiting for the Bank of Canada to wave the green flag,” said James Mabey, chair of CREA. “That first rate cut is expected to bring some pent-up demand back into the market, and those buyers will find there are more homes to choose from right now than at any other point in almost five years.”

There were 4.4 months of inventory available in May, the highest level since the fall of 2019 prior to the COVID-19 pandemic.

Photo: Adam Lloyd Home Selling Team