Canadian home sales dip in August amidst interest rate hike, but new listings rebound

In August, Canadian housing transactions decreased, marking the initial complete month of data following the recent interest rate increase by the Bank of Canada. Meanwhile, the Canadian Real Estate Association (CREA) reported that new property listings were on the rise. Specifically, home sales in August experienced a 4.1% drop compared to July but showed a 5.3% increase when compared to the previous year. The Bank of Canada, which had raised its policy rate to a 22-year high of 5% in July, decided to maintain this rate earlier in the current month.

In response to concerns about housing affordability, Canadian Prime Minister Justin Trudeau recently announced that his government plans to eliminate the federal 5% sales tax on the construction of new rental properties.

The Home Price Index from the industry group inched up by 0.4% for the month and showed a corresponding 0.4% increase on an annual basis. Additionally, the national average selling price rose by 2.1% year-over-year. New property listings increased by 0.8% compared to July, contributing to a total gain of over 24% since July. This rise brings new listings closer to typical levels, following a starting point in 2023 when they were at their lowest in 20 years.

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Canadian home sales dip in August amidst interest rate hike, but new listings rebound

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