© Reuters. FILE PHOTO: A for sale sign is displayed outside a home in Toronto, Ontario in Toronto, Ontario, Canada December 13, 2021. REUTERS/Carlos Osorio
By Fergal Smith
TORONTO (Reuters) – Canadian home sales rose in June as more homes became available for sale, but the pace of sales growth cooled compared to recent months as the Bank of Canada restarted its interest rate hiking campaign.
Home sales rose 1.5% in June from May, a smaller increase than was posted in April and May, data from the Canadian Real Estate Association showed on Friday.
Sales were up 4.7% on an annual basis.
“Housing markets appear to be stabilizing heading into the summer following some big ups and downs over the last year,” Larry Cerqua, CREA chair, said in a statement.
“Most importantly, the recovery in new listings over the last few months will give buyers more choice and should help to slow price growth over the second half of the year.”
The number of newly listed homes was up 5.9% in June from May, extending the recovery from a 20-year low in March and moving closer to more normal levels.
CREA’s Home Price Index climbed 2% on the month but was down 4.7% annually, while the national average selling price was up 6.7% on the year.
The Bank of Canada raised interest rates in June for the first time since January. On Wednesday, it tightened further, lifting its benchmark rate to a 22-year high of 5%.
With the Bank of Canada ending its pause on rate hikes “a major source of uncertainty has returned to the housing market,” CREA said in a separate statement.
The industry group downgraded its forecast for home sales in 2023 and 2024 compared to its April 2023 outlook. Sales are forecast to decline 6.8% this year from 2022 to 464,239 properties, before rebounding 11.2% in 2024.
