Canadian home prices were down 23% in July from February peak: CREA

Housing prices and activity continued to decline in July as high interest rates keep prospective buyers on the sidelines, according to the Canadian Real Estate Association.

The Canadian Real Estate Association found home sales fell for the fifth consecutive month between June and July.

On a seasonally adjusted basis, the association said sales in July fell 5.3 per cent compared with June. The actual number of sales last month was 37,975, down 29 per cent compared with July last year.

“That leaves activity back in the pre-COVID range, or roughly 40 per cent below the peak of the demand-side blowout seen last year,” said Robert Kavcic, BMO Capital Markets senior economist, in a note to analysts.

“Unadjusted, it was the quietest July for sales since the financial crisis in 2020.”

July’s drop in month-over-month sales was the smallest of the past five months. Market watchers said it’s too soon to say whether that trend will continue.

Still, economists and CREA chair Jill Oudil said it is a continuation of the market cooling from the torrid pace seen last year and early this year, when bidding wars were the norm.

Much of the cooldown has been attributed to the Bank of Canada increasing its key interest rate by one percentage point to 2.5 per cent in July in the largest hike the country has seen in 24 years.

Mortgage rate changes tend to mirror such hikes, impacting buying power.