Following the decline of real estate transactions in April and May, June marked the third consecutive monthly decline. According to the newly released statistics from the Candida Real Estate Association (CREA), although the real estate activities still remain high, national existing home sales fell 8.4% from May to June 2021, and the number of new listing properties fell 0.7%, and the MLS Home Price Index increased 0.9%.
Unlike the all-time high record in March, the current market activity is trending closer to the levels seen in the first half of 2020. Although sales are now down a cumulative 25% from the peak, and declined month over month, transactions in June 2021 still set a record for the month of June.
The Aggregate Composite MLS® Home Price Index (MLS®HPI) rose 0.9% compared to June 2020. This deceleration was initially seen more on the single-family side, and now trends are showing on townhome and condo segments. On average, year-over-year price growth is around 20% in B.C., although it is lower in Vancouver and higher in other parts of the provinces.
The underlying demand for housing will keep rising when the economy opens fully and immigration resumes, especially when university students return to campus living and adult children move into their own nests. One interesting finding is that condo sales in markets such as Toronto and Vancouver have picked up in recent months.
As opposed to what happened at the beginning of the pandemic where detached homes were dominating the market, we are now seeing condo demand rise. Moving forward, if condo demands consistently rise and take a bigger chunk of the sales pie, we could see this having a compositional effect on average prices.
Comments