Home resales in Canada were driven by the Greater Toronto Area in July with a 7.7% gain compared to 1.9% nationally.

The GTA also saw a flattening of price growth which has been declining in recent months. RBC’s senior economist Robert Hogue says that the national benchmark price appreciated at a faster rate (2.1% y/y) for the first time in 15 months.

In a monthly housing report, Hogue says that, with a few exceptions, price acceleration is unlikely to be a major factor in the Canadian housing market in the coming months.

“We see little risk that prices will accelerate much further in the near term. Except in a few areas (including Ottawa and Montreal where sellers have a slight upper hand), demand-supply conditions are balanced in the majority of markets in Canada, which does not support rapid price growth. Vancouver prices are in fact decelerating at present,” he writes in his report.

He added that he and his colleagues believe that the market is adapting to the impact of the mortgage stress test and while some sellers may still be reluctant to list their homes, RBC Economics forecasts a recovery of the resales market across most areas through the second half of 2018.

Supply boost for GTA, constraint nationally
The GTA saw more homes on the market in July but new listings were down 1.2% nationally.

There was a notable drop in new listings in Vancouver, Calgary and Edmonton, and to a lesser extent in Ottawa and Montreal.