Canada's Condominium Magazine

Bank of Canada: Toronto market stabilizing; Toronto also leads sales activity nationally for June while national home sales rose 4.1 percent May to June

Toronto led gains in sales activity for June over May of this year. The Bank of Canada also indicated last week that the housing market in Toronto is stabilizing, with Assistant Chief Economist at the Royal Bank commenting: “the market re-calibrating, if you will, and moving gradually higher.”[1] This is despite sligtly higher interest rates and tougher mortgage rules designed to cool the market.

Nationally, sales rose 4.1% from May to June — the largest month-over-month gain in 2018 — although this is down 10.7 % from June 2017. Prices fell 0.1 percent June over May, while prices increased 0.9% from the previous year on a National basis. Most indicators, point to a stabilized market. From the CREA statistical analysis:

“More than 60% of all local housing markets reported increased sales activity in June compared to May, led by the Greater Toronto Area (GTA). By contrast, sales in British Columbia continue to moderate.”

Inventory and listings remain low, especially in markets such as Toronto and Vancouver. While Toronto led the gains, Vancouver sales actually dropped 1.3 percent. Montreal rose 1 percent.


Monthly home sales with 10-year monthly moving average as compiled by CREA



Toronto demand remains high; inventory low

One reason Toronto continues to lead is ongoing strong economic fundamentals, especially a strong job market. Prices remain under pressure to rise due to low inventory against increasing demand.


Home Price Index by city from CREA and MLS data.


On the national level, according the latest report from the Canadian Real Estate Association (CREA), home sales rose 4.1% from May to June. Highlights in the report include:

  • National home sales rose 4.1% from May to June — according to MLS data
  • Actual (not seasonally adjusted) activity was down 10.7% from June 2017.
  • The number of newly listed homes eased 1.8% from May to June.
  • The MLS® Home Price Index (HPI) in June was up 0.9% year-over-year (y-o-y).
  • The national average sale price edged down 1.3% y-o-y in June.

“This year’s new stress-test on mortgage applicants has been weighing on homes sales activity; however, the increase in June suggests its impact may be starting to lift,” said CREA President Barb Sukkau. [2]


Composite MLS Housing Price Index on an annualized basis from CREA for Toronto market.


CREA’s chief economist  Gregory Klump, elaborated:

“The national increase in June home sales suggests activity may indeed be starting to turn the corner.”


Pricing under pressure to rise on low inventory

However, new listings declined in most of the larger urban markets. CREA reports: “With sales up and new listings down, the national sales-to-new listings ratio tightened to 54.3% in June compared to 51.2% in May. The June reading was within short reach of the long-term average of 53.4%.”

Composite HPI by city June 2018 CREA.




[1] Quoted from Bloomberg

[2] CREA Stats Report for June 2018

Auberge on the Park-Tridel


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