Real estate markets in the country’s largest metro areas remained relatively strong in July despite the Bank of Canada’s most recent rate hikes.
Data from some of the key real estate boards show continued year-over-year growth in activity and continued upward momentum in prices.
In Toronto, sales posted a 7.8% year-over-year gain, while in Vancouver they were up nearly 29%.
However, Andrew Lis, the Real Estate Board of Greater Vancouver’s director of economics and data analytics, said part of the strength is due to weaker sales a year ago as interest rates were starting to rise.
“Last July marked the point when the Bank of Canada announced their ‘super-sized’ increase to the policy rate of one full per cent, catching buyers and sellers off guard, and putting a chill on market activity at that time,” he noted.
Still, Lis notes that the current strength is against the backdrop of borrowing rates that are much higher compared to a year ago. “Despite borrowing costs being even higher than last July, sales activity surpassed the levels we saw last year, which I think says a lot about the strength of demand in our market and buyers’ ability to adapt to and qualify for higher borrowing costs,” he continued.
Signs of cooling ahead
On a monthly basis, sales in most markets were down, including in Vancouver (-3%), Toronto (-8.8%), while price gains moderated.
Pressure eased on prices thanks in part to an increase in supply as sellers have started listing homes in greater numbers, particularly in Ontario and British Columbia.
“If sustained, we would expect price gains to continue moderating in the coming months,” noted RBC economists Robert Hogue and Rachel Battaglia.
“Signs of cooling activity in some of Canada’s largest markets are consistent with our view that the spring rebound was premature, and will taper off further amid high interest rates, ongoing affordability issues and a looming recession,” they added. “We think the path ahead is more likely to be slow and bumpy, with the recovery gaining momentum when interest rates come down—a 2024 story.”
Here’s a look at the July statistics from some of the country’s largest regional real estate boards:
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Greater Toronto Area
| July 2023 | YoY % Change | |
| Sales | 75,250 | +7.8% |
| Benchmark price (all housing types) | $1,118,374 | +4.2% |
| New listings | 13,712 | +11.5% |
| Active listings | 15,371 | +0.3% |
“Home sales continued to be above last year’s levels in July, which suggests that many households have adjusted to higher borrowing costs. With that being said, it does appear that the sales momentum that we experienced earlier in the spring has stalled somewhat since the Bank of Canada restarted its rate tightening cycle in June,” said TRREB President Paul Baron.
“Compounding the impact of higher rates has been the persistent lack of listings for people to purchase compared to previous years,” he added.
Source: Toronto Regional Real Estate Board (TRREB)
Greater Vancouver Area
| July 2023 | YoY % Change | |
| Sales | 2,455 | +28.9% |
| Benchmark price (all housing types) | $1,210,700 | +0.5% |
| New listings | 4,649 | +17% |
| Active listings | 10,301 | -4% |
“While sales remain about 15% below the 10-year average, they are also up about 30 per cent year-over-year, which is not insignificant,” said Andrew Lis, REBGV Director of Economics and Data Analytics.
“Looking under the hood of these figures, it’s easy to see why sales are posting such a large year-over-year percentage increase,” he added. “Last July marked the point when the Bank of Canada announced their ‘super-sized’ increase to the policy rate of one full per cent, catching buyers and sellers off guard, and putting a chill on market activity at that time.”
Source: Real Estate Board of Greater Vancouver (REBGV)
Montreal Census Metropolitan Area
| July 2023 | YoY % Change | |
| Sales | 3,098 | +1% |
| Median Price (single-family detached) | $555,000 | +1% |
| Median Price (condo) | $395,000 | 0% |
| New listings | 4,354 | -9% |
| Active listings | 14,820 | +20% |
“After a disappointing month of June, transaction activity is picking up in the Montreal CMA. For the first time since the summer of 2021, it is the Island of Montreal that is pushing activity in the metropolis, driven by sales of small income properties and single-family homes,” said Charles Brant, Director of the QPAREB’s Market Analysis Department.
“Clearly, some buyers are less affected by the rise in interest rates. The majority of buyers currently in the market can count on income or equity from their real estate holdings, with values compared to last year,” he added. “The many newcomers with immigration status allowing them to buy a property in Quebec are also joining the ranks of this category of buyers with good purchasing power.”
Source: Quebec Professional Association of Real Estate Brokers (QPAREB)
Calgary
| July 2023 | YoY % Change | |
| Sales | 2,647 | +17.7% |
| Benchmark price (all housing types) | $567,700 | +5.7% |
| New listings | 3,247 | +2.2% |
| Active listings | 3,488 | -34.8% |
“Continued migration to the province, along with our relative affordability, has supported the stronger demand for housing despite higher lending rates,” said CREB Chief Economist Ann-Marie Lurie.
“At the same time, we continue to struggle with supply in the resale, new home and rental markets resulting in further upward pressure on home prices,” she added.
Source: Calgary Real Estate Board (CREB)
Ottawa
| July 2023 | YoY % Change | |
| Sales | 1,658 | +11% |
| Average Price (residential property) | $746,445 | -4% |
| Average Price (condominium) | $448,380 | +2% |
| New listings | 2,758 | -14% |
“Both transactions and average prices are up from last July indicating consumers remain confident in the market notwithstanding the two recent quarter-percent interest rate hikes by the Bank of Canada,” said OREB President Ken Dekker.
“We’re only a month into the third quarter, but based on July’s positive indicators, we are likely to see solid year-over-year results in the second half,” he added.
Source: Ottawa Real Estate Board (OREB)
