Canadian Existing Home Sales (August 2024)

Canadian home sales edge higher in August 

• Canadian existing home sales increased 1.3% month-on-month (m/m) in August. However, they were some 8% below their pre-pandemic level and sales have recorded modest performance so far in Q3 after factoring in July's dip. In August, nation-wide sales were supported by gains in Alberta (4.2% m/m), and Quebec (3.4% m/m) while being restrained by B.C. (-2.3% m/m) and Ontario (-0.5% m/m).
• New listings increased 1.1% m/m in August, leaving them above their long-term average. With sales rising nearly in line with listings, the Canadian sales-to-new listings ratio was almost unchanged at 53% - still comfortably in balanced territory. There were about 177.5k properties listed for sale at the end of August, up 20% year-on-year but still 10% below historical averages for the month.
• Canadian average home prices declined 1.1% m/m in August. Mirroring sales, price gains were recorded in Alberta (1.8% m/m) and Quebec (0.4% m/m) while declines were registered in B.C. (-1.2% m/m) and Ontario (-0.7% m/m). 
• The MLS home price index, a more "like for like" measure, was unchanged during the month. Prices for both detached and condo units were unchanged.  

Key Implications

• Housing was stuck in neutral for the 2nd straight month in August, even as bond yields have declined significantly in recent months. As such, the waiting game continues for housing to begin pushing meaningfully higher. Typically, when yields fall like they have, there is some pickup in activity. This time around, it could be the case that potential buyers are waiting for rates to move even lower before jumping in, especially with the Bank of Canada's relatively transparent messaging that further rate cuts are on the way. 
• Our view is that the thaw for housing will eventually come. We currently expect healthy Canadian home sales growth over the next several quarters starting in Q4, although price growth will likely be restrained by a tough affordability backdrop and loose supply/demand conditions in B.C. and Ontario. 

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