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The recent lower mortgage rate environment has yet to revive Canada’s slumping housing market, a new report has found.
RBC Economics published a report this month examining the impact of two rate cuts by the Bank of Canada, concluding the decreases have failed to spur activity in most major Canadian real estate resale markets.
The Bank of Canada cut rates 25 basis points in June and again in July, but through the summer most markets did not see an increase in sales activity, though new listings did rise. Calgary led major cities in sales declines in August on a percentage basis. Sales fell nearly 20 per cent year over year. At the same time, new listings increased 13 per cent year over year in Calgary, also the highest among the six urban markets in the study. Vancouver saw the next largest decline in sales at 17 per cent while new listings there grew about four per cent.
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Sales in the Fraser Valley experienced the third largest percentage drop, down about 16 per cent while listings grew about six per cent compared with August last year.
In Toronto, sales fell about five per cent, and new listings grew 1.5 per cent.
Edmonton and Montreal, however, stood out with year-over-year increases in sales, the report found.
In Edmonton, sales grew nearly 16 per cent while in Montreal, sales were up about nine per cent. New listings were also up in Edmonton 7.5 per cent, and nearly two per cent in Montreal.
In turn, the report noted those two cities were the only markets favouring sellers. Others exhibited balanced conditions last month, except Toronto.
Canada’s largest market now modestly favours buyers. The city also led the nation with the largest percentage increase in inventory, up more than 46 per cent year over year. All other cities except Edmonton saw double-digit percentage increases in inventory — a metric denoting homes available for sale at month’s end.
Edmonton’s inventory dropped 13 per cent in August, year over year.
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