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Sales dropped for the fourth consecutive month in July, but the Canadian Real Estate Association says homes are still in short supply
Real estate listings and sales are down across Canada. According to the Canadian Real Estate Association (CREA) homes sales slipped for the fourth month in a row, dropping 3.5 per cent month-over-month in July and 28 per cent since activity peaked in March. New listings also receded 8.8 per cent month-over-month.
Buyers and sellers seem to be taking a small break from the pandemic-era real estate pandemonium to enjoy the summer months before the fall and the fourth wave forces us all indoors.
“The slowdown we’ve seen in home sales over the last few months has not been surprising, given that the level of activity we were seeing back in March was unsustainable,” says CREA senior economist Shaun Cathcart in a statement. “But we are not returning to normal, we are only returning to where we were before COVID, which was a far cry from normal.”
Cathcart and CREA chair Cliff Stevenson reiterated a need for more supply, the former emphasizing the need for homes that serve buyers who are priced out of the detached housing market but need more room than a two-bedroom condo. “[After] years of everyone agreeing that medium-density housing was the future, we are still referring to it as the ‘missing’ middle.”
The comments come just after Statistics Canada reported a slow down in residential construction, which fell 5.8 per cent in June to $13.8 billion, following a three per cent decrease in May. Investments in single-family homes dropped a sharp 7.3 per cent in June.
CREA says that the national sales-to-new listing ratio was up to 74 per cent in July (from 69.9 per cent in June), due to the decline in new listings led primarily in big real estate markets in Canada like the Greater Toronto area (GTA), Montreal, Vancouver and Calgary.
The CREA report also added that there were 2.3 months of inventory in July, which they say is “extremely low” and indicative of a strong seller’s market.
Real estate sales in the GTA were down 15 per cent month-over-month and year-over-year in July with prices for detached and semi-detached homes marginally cooling. The out-of-reach figures for such freehold homes drove condo sales and prices back up with 1,756 sales in July at an average price of $715,977.