After remaining stable in June, the lethargy continues for house prices in Canada’s major urban centers in July, with only marginal growth of 0.2% during the month. This relative stability comes as the resale market fell back slightly during the month after a brief rebound in activity in June, which followed the start of the Bank of Canada’s monetary easing cycle. All in all, resale market conditions point to a fairly balanced market between buyers and sellers at national level, reducing pressure on prices. While record population growth, a shortage of housing supply and the Bank of Canada’s forthcoming rate cuts will continue to support the Canadian real estate market in the months ahead, we are cautiously optimistic about the magnitude of any recovery in the housing market in the months ahead and its potential impact on prices. Indeed, many uncertainties remain, including the risk of a further deterioration in the labour market, particularly among young people who are facing the worst affordability conditions in decades. It’s true that consumer confidence has been somewhat reinvigorated by the start of overnight rate cuts, but interest rates remain in highly restrictive territory for the time being.

August 2024