In August, Canadian home sales decreased by 4.1% compared to July, following the Bank of Canada’s interest rate hike in July. Despite this decline, annual home sales were up by 5.3%. New property listings increased by 0.8% from July, bringing them closer to average levels after starting the year at a 20-year low. The Home Price Index showed a 0.4% month-to-month increase and a corresponding 0.4% annual increase, while the national average selling price rose by 2.1% year-over-year. To address housing affordability concerns, Canadian Prime Minister Justin Trudeau announced the removal of the federal 5% sales tax on new rental property construction.
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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