The month of August saw more sales than July, however, it still represents a dip of 34.2% in sales volume from last year. What does that mean? Well, what we’re seeing on the street is a little bit of support coming into the market at this current pricing level. Remember, we’ve come down quite a bit from the peak in February. In some home types, in some areas, you can see that the decline in prices has been about 25%. That is significant, however, it practically is the exact opposite of what happened in the six months leading up to the peak, bringing us right back to where we started 12 months ago.

We’re Seeing A Little Bit of Price Support at Current Levels

When you look at the graphs, what you’ll find is that some of the home types are starting to move sideways, and more housing types are moving into balanced territory. This means that the housing price decline has taken a break for a month. As the Bank of Canada has raised interest rates by another 0.75% in September, we will watch to see if the support at the current level holds or if the rate increase will create another month of price decline. What we’ll likely see is support for the smaller housing types (e.g. townhomes and condos) with more downward pressure on detached homes as more and more buyers are forced into lower price points by the increase in borrowing costs. That trend is reflected in the sold-price to listing-price percentages seeing more of the smaller home types selling closer to or at 100% of the list price.

All Eyes on Inflation Now

All eyes will be on the inflation numbers that are released on September 13th and October 13th. If we see an increased reduction in inflation that will bode well for the Bank of Canada interest rate announcement at the end of October. If the inflation numbers stay high then I would expect another, smaller, rate increase at that point. True pricing support, in my opinion, will not arrive until the Bank of Canada states that they are ready to take a break from further increases.

Select your city name to view August’s latest update

GTA, Toronto, Mississauga, Oakville, Burlington, Milton, Hamilton

Use Arrows Above To Select Your City

Links to other e-newsletter Articles