Market update August 2024: BoC doubles down, prices drop

Just as the home sales and rental markets started to adjust to the Bank of Canada’s June interest rate cut, the BoC did it again.  

• On July 24, the Bank cut interest rates by a further 25 basis points from 4.75% to 4.5%.

• As a result, Canada’s current mortgage rates have improved slightly, with three- and five-year fixed rates returning to below 5%.

• It remains to be seen if this reduction in homeownership costs will lead to fewer personal use evictions from rental properties or fewer landlords exiting the rental market.

• At the same time, the Canadian Real Estate Association (CREA) reports an average national home price of $696,179 in June – down 0.4% month over month and 1.6% year over year.

• Things may be looking up, though. CREA also reports a 3.7% increase in month-over-month home sales in June.

• Ontario continues to have one of the highest average home prices across the country (second only to British Columbia), at $884,761. This price remains out of reach for most renters, suggesting a mass transition to homeownership is unlikely anytime soon.

• June brought some relief for renters, as average asking rents fell 0.8% from an all-time high of $2,202 in May to $2,185. This is the largest month-over-month decline since early 2021 during the pandemic, according to Rentals.ca.

• Additionally, average rents for purpose-built and condominium units in Toronto declined by 2.5% month over month and 3.5% year over year in June, reaching a 22-month low of $2,715.

• The Canada Mortgage and Housing Corporation (CMHC) reports a 9% decrease in nationwide housing starts, from 264,929 in May to 241,672 in June.

More rental market headlines

2024 online rental search demand & trends – Rentals.ca

How Mississauga is improving its free garden suite plans program – Storeys

Desperate for work, where will recent college grads move to? – PayProp blog