Canadian home sales slowed down significantly in June, according to a report released by the Canadian Real Estate Association (CREA).
The number of homes sold via Canadian MLS Systems dropped 6.7% in June, which was the largest monthly decline since June 2010.
The Greater Toronto Area (GTA) experienced the greatest decline in the country as home sales were down from 70% from May 2017. The Greater Golden Horseshoe housing markets also saw a drop in sales.
“Changes to Ontario housing policy made in late April have clearly prompted many homebuyers in the Greater Golden Horseshoe region to take a step back and assess how the housing market absorbs the changes,” said Gregory Klump, the CREA’s chief economist, in a release.
“The recent increase in interest rates could reinforce a lack of urgency to purchase or, alternatively, move some buyers off the sidelines before their pre-approved mortgage rate expires. In the meantime, some move-up buyers who previously purchased a home before first selling may become more motivated to reduce their asking price rather than carry two mortgages.”
Meanwhile, the CREA also reported that monthly declines in housing sales were also reported in BC’s Lower Mainland, Kingston, Montreal, and Quebec City.
“Canadian economic and job growth have been improving, which is good news for housing demand,” said CREA President Andrew Peck. “However, it also means that interest rates have begun to rise, which may impact homebuyer confidence – particularly in pricier markets like Toronto and Vancouver where recent housing policies had already moved potential buyers to the sidelines. In lower priced markets, the effect of higher interest rates on housing affordability will be relatively muted.”
National average price for homes sold in June 2017 continues to remain steady at $504,458, up just 0.4% from where it stood one year earlier.
The national average of home prices is increased by sales activity in Greater Vancouver and Toronto, which are two of the country’s most active and expensive housing markets.
Excluding Vancouver and Toronto’s markets from calculations trims more than $100,000 from the national average price of $394,660.