CREA says home sales in May post first year-over-year increase since June 2021

OTTAWA — Canada’s real estate market continued to heat up in May with home sales posting their first year-over-year increase since June 2021 and the average price seeing its first year-over-year gain in a year.

The findings released by the Canadian Real Estate Association (CREA) suggested a marked shift away from the sluggish sales and slumping prices the country has seen since last year.

“The rebound has been evident for a number of months at this point, but May really drove the point home,” CREA chair Larry Cerqua said in a news release.

The association said the number of home sales in May totalled 54,241, a 1.4 per cent gain compared with the same month last year.

Seasonally adjusted sales for May were 40,220, up 5.1 per cent compared with April.

The increase came after months of buyers sitting on the sidelines awaiting a bottom for home prices. But as they waited, the Bank of Canada hiked interest rates, helping push up mortgage rates. After pausing earlier this year, the central bank hiked rates again this month in a bid to tame inflation.

In recent months, sellers have been as reticent as most buyers to wade into the market, reasoning that they would fetch far less for a home than neighbours had, when the market was still roaring during the height of the COVID-19 pandemic

Now, both buyers and sellers appear to be ready to buy or list homes and it’s pushing prices up again.

The actual national average home price was $729,044 in May, up 3.2 per cent from May 2022, CREA said.

The seasonally adjusted average home price was $715,290, up 2.7 per cent from April.

Despite the increases pointing to a rebound, Cerqua felt some aspects of the turnaround are still yet to be determined.

“The degree to which a recovery will be able to play out on the sales side as opposed to the price side will come down to supply, which remains quite low,” he said.

The number of newly listed properties totalled 59,237 in May, a 6.8 per cent rose from April. The actual number of new listings amounted to 87,037, still down 13.6 per cent from May 2022.