Mortgage rates up, home sales down in April

Sales activity, historical, forecast and 10-year average (CNW Group/Canadian Real Estate Association)

Ontario Construction News staff writer

Canadian Real Estate Association (CREA) statistics released recently show national home sales dropped 12.6 per cent in April and the number of newly listed properties fell 2.2 per cent.

The decline placed monthly activity at the lowest level since the summer of 2020, CREA reported.

“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, dhair of CREA.

“For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies. Of course, there are significant regional differences.”

While the national decline was led by the Greater Toronto Area (GTA) simply because of its size, sales were down in 80 per cent of local markets, with most other large markets posting double-digit month-over-month declines. The exceptions were Victoria, Montreal and Halifax-Dartmouth where sales edged up slightly.

The actual (not seasonally adjusted) number of transactions in April 2022 were 25.7 per cent below the record for that month set last year. That said, as has been the case since last summer, it was still the third-highest April sales figure ever behind 2021 and 2016.

“After 12 years of ‘higher interest rates are just around the corner’ here they are,” said Shaun Cathcart, CREA’s senior economist. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year, because that is already being factored into fixed mortgage rates.”

The small monthly decline in new listings was the result of a fairly even split between markets where listings rose and those where they fell. Notable declines were seen in the Lower Mainland and Calgary while listings jumped higher in Victoria and Edmonton.

There were 2.2 months of inventory on a national basis at the end of April 2022, still historically very low but up from the previous eight months. The long-term average for this measure is a little over 5 months.

The actual (not seasonally adjusted) national average home price was a little over $746,000 in April 2022, up 7.4% from the same month last year, heavily influenced by sales in Greater Vancouver and the GTA.

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