Canadian real estate market sales fall in April

The dampening effect of interest rate hikes on the Canadian real estate market, which has been heating up rapidly in recent years, is emerging. Statistics released by the Canadian Real Estate Association on May 16 showed that national home sales in Canada fell 12.6% in April this year from the previous month.

April’s real estate price index fell 0.6% month-on-month, but was still up 23.8% year-on-year. The real average selling price of real estate nationwide rose 7.4% year-on-year in April on a non-seasonally adjusted basis. Actual transaction volumes, not seasonally adjusted, were 25.7% lower than a year earlier.

Canadian real estate

After several years of record-breaking growth, real estate markets in many parts of Canada have cooled sharply over the past two months, in line with a jump in interest rates and buyer fatigue, said Jill Odell, president of the Canadian Real Estate Association. compliant.

Sales are in decline in about 80 per cent of local markets across Canada. The national average home price is largely influenced by sales in the two most active and expensive markets, Metro Vancouver and the Greater Toronto Area.

Home sales recorded by the nationally connected system fell 12.6 per cent between March and April this year, showing that monthly activity in the housing market was at its lowest level since summer 2020.

The number of new listings fell 2.2% year-on-year in April, and the ratio of sales to new listings fell to 66.5%, meaning that activity in the housing market is at its lowest level since June 2020. The Canadian Real Estate Association believes that this ratio is on the verge of forming a seller’s market and a balanced market.

Canada’s nationwide housing market still had 2.2 months of inventory at the end of April, a historically low level.

After the emergence of the COVID-19, the Bank of Canada slashed interest rates to ultra-low levels, and house prices continued to rise across Canada, with an overall increase of more than 50% so far.

The Bank of Canada announced on March 2 that it would raise interest rates for the first time since October 2018, raising the benchmark interest rate from 0.25% to 0.5%. On April 13, the Bank of Canada further raised interest rates to 1% and announced that it would start a quantitative tightening policy. The next window for the Bank of Canada to raise interest rates is June 1. It is widely expected that the Bank of Canada will raise interest rates further.

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