Canada’s real estate markets bounced back in May, but remains deflated compared to historical standards.
The Canadian Real Estate Association (CREA) National home sales rose 56.9 per cent compared to April, which is a record monthly increase. However, it was the worst showing for May since 1996 and follows a 56.8 per cent month-over-month drop in April.
Compared to the same period last year, sales fell 39 per cent in May. The national average price was down 2.6 per cent year-over-year to $494,500. Without Toronto and Vancouver, the average price was $401,000.
Newly listed properties were up 69 per cent. New supply was still 38.1% below May 2019.
COVID-19 lockdowns put the typically busy spring season into a deep freeze, but CREA thinks the market is starting to turn the corner.
“The big picture is things are moving in the right direction but still have a long way to go. That said, under the surface those numbers have been steadily rising from mid-April right through the first week of June, so June may end up a similar story,” said Shaun Cathcart, CREA’s senior economist, in a release.
“With sales and new listings moving down and now back up in tandem, and overall supply still falling, prices appear to be holding firm at this point.”
CREA says sales were up across the country’s biggest markets. Sales rose by 53 per cent in the Greater Toronto Area (GTA), 92.3 per cent in Montreal, 31.5 per cent in Greater Vancouver, 20.5 per cent in the Fraser Valley, 68.7 per cent in Calgary, 46.5 per cent in Edmonton, 45.6 per cent in Winnipeg, 69.4 per cent in Hamilton-Burlington and 30.5 per cent in Ottawa.
Robert Kavcic, senior economist at BMO, says it’s too early to judge the effect on prices considering sales and listings have been shut in.
“It’s entirely possible that, at least in some of the stronger pre-COVID markets, listings get snapped up quickly when they start to come back online more substantially, leaving less of a near-term impact on prices,” Kavcic said in a note.
“Longer term, challenges will persist across some pockets of the market. This all could shape a market that looks less extremely negative in the near term than some fear, but one that also looks flatter over the medium term. That would be pretty atypical for such a cyclical sector—but this is no typical downturn.”
Forecasts for prices have varied across the board. CMHC made headlines with a call for a 9 per cent to 18 per cent decline over 12 months.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.