Canada’s available homes for sale surge with second-biggest jump on record

Canada’s housing market posted a surge in the number of properties available for sale, one of the biggest monthly gains in listed inventory on record, as homebuyer demand waned amid persistently high interest rates.

 

The total number of properties on the market rose 6.5 per cent in April from March, the second-fastest monthly gain ever, according to data released Wednesday from the Canadian Real Estate Association. That pushed the total stock of homes for sale to its highest level since before the pandemic, the data show.

 

The market loosened up with home sales falling 1.7 per cent in April from a month earlier, even as the number of properties newly listed for sale rose 2.8 per cent, the real estate board data show. Prices were mostly flat, with a measure of the benchmark cost for a home staying unchanged from the previous month at $719,400 (US$528,100).

 

The return of warmer weather typically heralds the busiest season for housing markets across Canada, but with borrowing costs still around their highest in 20 years and prices just slightly down from last year’s spring market, many buyers are staying on the sidelines. And many buyers and sellers are grappling with the prospect that any rate cuts by the Bank of Canada might occur later in the year than expected.

 

“Mortgage rates are still high, and it remains difficult for a lot of people to break into the market,” James Mabey, chair of the real estate association’s board, said in a statement. “For those who can, it’s the first spring market in some time where they can shop around, take their time and exercise some bargaining power.”

 

This shift has matched a change in expectations for interest-rate cuts. At the start of the year, traders were expecting the Bank of Canada to lower its policy rate to about 3.75 per cent by the end of 2024. Now, they’re betting it will drop only to roughly 4.5 per cent.

 

 

 

This article was first reported by BNN Bloomberg