The average selling price of a Canadian home was $688,000 last month, a figure that has risen by more than 38 per cent in the past year.
The Canadian Real Estate Association, which represents real estate agents across the country, said in a press release Tuesday that while prices are still up sharply from a year ago, the gains appear to be moderating.
The $688,000 figure is down from $696,000 in April and just over $716,000 in March, which suggests that while comparisons to the early days of COVID show a red-hot market, it is in fact cooling.
“While housing markets across Canada remain very active, we now have two months of moderating activity in the books, and that goes for demand, supply and prices,” CREA chair Cliff Stevenson said.
Aside from prices, the volume of homes sold also seems to be cooling compared to the peak it hit in March 2021.
More than 50,000 homes were sold during the month, which was more than twice as many as sold in the same month a year earlier. But May 2020 was the slowest May for home sales on record, as sales were drastically curbed by the nascent COVID-19 pandemic.
Evidence of ‘offer fatigue’
Home sales hit nearly 70,000 in March, but in the two months since, have fallen by 11 and now seven per cent.
“More and more, there is anecdotal evidence of offer fatigue and frustration among buyers, and the urgency to lock down a place to ride out COVID would also be expected to fade at this point, given where we are with the pandemic,” Stevenson said.
CREA says the average selling price can be misleading because it can be skewed by sales of expensive homes in pricey markets like Toronto and Vancouver. That’s why it tabulates a different number, known as the House Price Index, which adjusts based on the volume and types of homes sold.
But even the HPI rose by more 24 per cent in May, which is the highest increase on record. But “it is not likely to go much higher at this point,” CREA says, partly because price increases are slowing down on a monthly basis, in Ontario especially.
“Maybe we all finally have something else to think about other than housing and being stuck at home all the time,” CREA’s chief economist Shaun Cathcart said. “For now at least, with the light at the end of the tunnel so close, it feels like housing may take a back seat to us all starting to get our lives back to normal this summer.”