Canadian existing home sales fall modestly in June, likely to trend higher in H2 2019

Canadian existing home sales dropped sequentially in June. Sales fell 0.2 percent after rising 3 percent. This was the second monthly fall in 2019, with the first being a weather-induced drop in February.

Existing home sales dropped 5 percent in Vancouver. Nevertheless, this only partly reversed the 24 percent sharp rise in May. In other markets in B.C., sales came in mixed, rising in Fraser Valley and Okanagan-Mainline and falling in Victoria.

Performances were subdued in the oil-producing provinces in June, with sales falling in Calgary and Edmonton. However, sales rose in both markets in the second quarter overall. Sales were also down in Regina and Saskatoon in the month.

Sales rose in Toronto, the fourth straight monthly gain, as sound fundamentals are underpinning activity. Markedly, single-detached sales rose on a year-to-date basis in Toronto, marking a stark contrast to the past few years. Excluding Toronto, sales rose in Ontario, stimulated by gains in London and Barrie.

Sequentially, sales rose 4 percent in Quebec and 11 percent year-on-year, as a strong economy continue to stimulate demand. Throughout the volatile Atlantic Provinces, sales dropped in each of New Brunswick, Nova Scotia, PEI, and Newfoundland and Labrador. National new listings rose 0.8 percent sequentially in June, stoked by gains in Ontario and Quebec.

Throughout Canada, markets stayed balanced, with the sales-to-listings ratio at 57.1 percent in June. The average home price rose 1.3 percent sequentially in May, marking the fourth straight monthly gain. On a year-on-year basis, prices rose 1.8 percent, driven by gains in Ontario and Quebec.

On the contrary, the annual gain in average home prices, the quality-adjusted MLS home price index dropped 0.3 percent year-on-year. Markets in Alberta and B.C. continue to be a drag on price growth.

Home sales took a modest breather in June, which is possibly a mild disappointment given that mortgage rates also dropped in the month, noted TD Economics in a research report.

“Moving forward, home sales will likely continue to trend higher in the second half, supported by a solid job market, strong population growth, low borrowing costs, further distance from past restrictive policies and supportive measures for first-time homebuyers”, added TD Economics.

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