The residential real estate surge that started in April carried through May. The latest numbers from the Canadian Real Estate Association show both sales and prices continued to rise.
May saw a 5.1% increase in sales compared to April. (April recorded an 11.3% increase over March.) And May sales were up 1.4% over a year earlier. While that is a small gain CREA says it is notable because it is the first national year-over-year sales increase since June 2021.
The national average home price in May rose to $720,000, a 3.2% increase compared to a year earlier. It is the first year-over-year gain in this measure in 12 months. Greater Toronto and Greater Vancouver continue to have an outsized influence on the national average price. When those two markets are taken out of the calculation the price drops to about $579,000.
CREA's preferred measure of pricing, the Aggregate Composite MLS Home Price Index, climbed 2.1% on a month-over-month basis in May. However, it remains 8.6% below 2022 levels.
There was a significant jump in new listings in May, up 6.8% from April. However, that barely kept pace with the sales increase and new listings remain at historically low levels. The sales-to-new listings ratio was 67.9%, little changed from 69% in April, and firmly favouring sellers. The long-term average is 55.1%.
How long this market rebound will last remains a point of speculation. Many market watchers believe the resumption of interest rate hikes by the Bank of Canada could send anxious buyers back to the sidelines, to wait for interest cuts that are forecast for next year.