Photo: James Bombales
Industry watchers have speculated that the Canadian housing market could turn a corner in June and, according to the latest housing figures, they may be right.
National home sales jumped 4.1 per cent month-over-month in June, according to data from the Canadian Real Estate Association, released today.
Over 60 per cent of all local markets reported sales increases last month, led by a 16 per cent jump in the GTA, while the BC market continued to struggle.
“The [4.1 per cent month-over-month sales increase] is the first significant increase that we’ve seen this year, following the introduction of the new mortgage stress test in January,” CREA chief economist Gregory Klump tells Livabl.
But, while he acknowledges that it could be a sign that the market might begin warming up, he says it’s still too soon to say for sure.
“One car doesn’t make a parade,” says Klump. “This increase is a welcome step in the right direction, but we can’t know what will happen next month.”
Meanwhile, the Aggregate Composite MLS Housing Price Index was up 0.9 per cent year-over-year in June, marking the 14th consecutive month of decelerating gains and the smallest increase since 2009.
“Home prices, while they’re still increasing, are accelerating at a much slower rate,” says Klump. “The price increases have been centred in the condo market, while the cost of single family homes has remained quite stable.”
The price of a condo unit jumped 11.3 per cent year-over-year last month, while one-storey and two-storey single family home prices fell 1.8 and 4.1 per cent year-over-year, respectively.
The national average price for a home was just under $496,000, down 1.3 per cent year-over-year.
Moving forward, rising interest rates could put a damper on both sales and prices, according to Klump.
“We’re in a rising interest rate environment, and that affects affordability, what buyers are able to purchase,” he says. “So we’ll have to see what effect that has on the market in the coming months.”