CREA: Weakest May home sales in almost thirty years

by Ephraim Vecina17 Jun 2020

Home sales have recovered significantly from the national market’s worst April reading in nearly 40 years, although the average sale price remained relatively steady, the Canadian Real Estate Association reported.

In May, Canadian housing transactions grew by 56.9% month-over-month. While this indicated substantial recovery, however, last month was similarly the weakest May in terms of sales in around three decades.

“May's housing numbers are certainly a mixed bag of results,” said Shaun Cathcart, CREA chief economist. “Sales and new listings are both way up month-over-month but still way down compared to year ago.”

With government-mandated lockdowns taking hold of the national market, the COVID-19 pandemic has ground traditionally strong spring sales to a virtual halt.

“The big picture is things are moving in the right direction but still have a long way to go,” Cathcart told CBC.

The average home sales price in May was $494,500, which was a bit higher than the $488,000 level in April, but 2.6% lower on an annual basis. Removing Toronto and Vancouver from the calculations yields an average of $401,000 in May.

“Because the level of transactions is still so low, average price data should be taken with a large grain of salt,” said Rishi Sondhi, an economist with TD Bank. “With the level of activity still at multi-decade lows, pent-up demand is likely to fuel additional gains for at least another few months [but] the big question is what happens after this initial burst.”

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