Canada: How Low Can the Housing Market Go?

Summary of the publication

• Existing homes sales fell 5.6% in June on a seasonally‑adjusted basis – for the fourth consecutive monthly decline. On a nonseasonally-adjusted basis, sales in June were 23.9% below the record level reached in June 2021.
• Sales were down in three quarters of local markets in the month, led by declines in the largest cities including the Greater Toronto Area, Greater Vancouver, Calgary, Edmonton, Ottawa and Hamilton-Burlington.
• Meanwhile, the average sale price of an existing home fell by 4.3% in June to $673K on a seasonally-adjusted basis, making it four monthly declines in a row. Looking to the composite benchmark price, which adjusts for market composition, the purchase price of a home was down 1.9% from May 2022 but was still up 14.9% y/y.
• The number of new listings rose 4.1% over May, pushing the sales-to-new listings ratio down further to 51.7% – its lowest level since January 2015 and settling on nearly exactly what constitutes a balanced market.