After a somewhat promising June, data from Canadian Real Estate Association’s (CREA) July 2024 statistics report reveals housing market activity effectively stalled in July, despite the July 24 interest rate cut.

In June, the “fledgling” market saw slight increases in month-over month sales, tighter year-over-year market conditions, and the national average home price increase for the first time in 11 months. But in July, progress halted, with home sales ticking down 0.7% from June’s 3.7% month-over-month increase. According to the report, decreases were minimal in larger centres, and drops in the GTA and Calgary markets were largely offset by increased sales activity in Edmonton and Hamilton-Burlington.

TORONTO, Aug. 15, 2024 /CNW/ — With first-time buyers locked out of the country’s most expensive housing markets, the move-up/down segments, as well as investors, have been fuelling detached home-buying activity in the first six months of 2024 in the Greater Toronto Area (GTA), Greater Vancouver Area (GVA) and Fraser Valley, according to a report released today by RE/MAX Canada.

The RE/MAX Hot Pocket Communities Report surveyed 83 markets in the GTA, the GVA and the Fraser Valley, and found that close to 40 per cent of markets (33/83) reported an increase in detached housing values in the first half of the year, while 30 per cent reported an upswing in the number of sales (25/83). The Greater Toronto Area’s 416 area code led the other regions in rebounding sales momentum, with just over 34 per cent of neighbourhoods stable or experiencing growth in detached home-buying activity—ahead of the 905, Greater Vancouver and Fraser Valley. Limited inventory levels in Greater Vancouver and the Fraser Valley are supporting price appreciation in the detached home category, with Fraser Valley leading with 83.3 per cent (5/6) of local areas noting an upswing in average price, followed by Greater Vancouver with 70.6 per cent of neighbourhoods marking an increase in median values.

In the first half of 2024, seasoned buyers and investors drove detached home purchases in Canada’s priciest markets, including the Greater Toronto Area (GTA), Greater Vancouver Area (GVA), and Fraser Valley, while first-time buyers were sidelined by affordability issues, according to a Re/Max Canada report.

“While affordability remains the top obstacle for first-time homebuyers, more experienced buyers and investors are taking advantage of softer housing values,” Re/Max president Christopher Alexander said in the Aug. 15 report. He noted that these buyers are making their moves ahead of the Bank of Canada’s end to quantitative tightening, positioning themselves for potential gains when the market fully rebounds.

The Re/Max Hot Pocket Communities Report, which surveyed 83 markets across the GTA, GVA, and Fraser Valley, revealed that detached housing values increased in close to 40 per cent of these markets during the first half of 2024. Additionally, 30 per cent of markets reported a rise in the number of sales. This activity was particularly strong in the GTA’s 416 area code, where more than 34 per cent of neighbourhoods had stable or growing detached homebuying activity, outperforming the 905 region, Greater Vancouver, and Fraser Valley.

Following the Bank of Canada’s two consecutive interest rate cuts with potentially more to come by the end of the year, variable-rate mortgages are starting to pique homeowners interest again, mortgage brokers say.

Variable-rate mortgages are tied to rate changes by the Bank of Canada, which on July 24 dropped down by a 0.25 percentage point to 4.5 per cent. Meanwhile, most fixed-rate mortgages are tied to the five-year bond yield, meaning when the bond yield goes up so does the interest on fixed-rate mortgages — and when inflation rises, bond yields tend to follow suit. Bond yields have dipped recently, resulting in lower fixed-rate mortgages.

A new report from real estate listing site Wahi shows that the majority of neighbourhoods in and around Toronto are experiencing homes selling for below asking price, with underbidding on homes now the norm.

According to Wahi’s newly released July 2024 Market Pulse Report, bidding for homes in the GTA cooled for the fourth consecutive month in July, with Wahi noting the slowdown even persisted through the Bank of Canada’s second rate cut of the year.

Record population growth. Falling housing construction. These are the ingredients of Ontario’s housing crisis, which continues to worsen as rents across the Greater Toronto Area exceed $2,000 for a one-bedroom apartment.

The impact of population growth can hardly be overstated. In the last 36 months, the province has experienced a decade’s worth of population growth, growing by 1.2 million people. In the first six months of the year alone, Ontario’s population grew by nearly 200,000.