Canada’s real estate market conditions are tightening, following 4 months of sales declines

The national real estate market showed the fourth consecutive month of sales decreases, caused by a sharp supply drop even amid almost record high prices.

According to the Canadian Real Estate Association (CREA), July saw home sales going down by 3.5%, while listings fell by 8.8%.

As a result, the national average home price went by 0.3% to about $669,200. At the same time, the ratio of sales to new listings was up from 70% in June to 74% last month.

Initially, the pandemic provoked a purchasing madness in Canada, pushing home sales and prices to record high levels in March. Since then, the real estate market has been cooling down as potential buyers faced a lack of new houses supply.

Although massive vaccination started bringing the country to a normal life, we’ve faced one of the most severe housing shortages in the developed world and quite weak prospects of enough new supply appearing in the nearest future.

“We are not getting back to normal, we are only returning to a state we were in before the pandemic, and it’s far from normal”, – Shaun Cathcart, the national real estate board’s senior economist, noted. “The issue of strong housing demand amid weak supply hasn’t been solved, it became worse”.

The listings drop was reported in many large Canadian cities, including Toronto, Montreal and Vancouver. The new supply fell in almost three quarters of Canada’s markets.

However, in spite of the market tightening and the decline in activity from June, July home sales still exceeded the average result of the precious ten years.