Canadian Home Sales Decline Amid Rising Interest Rate Risks

National home sales in Canada fell 0.7% month-over-month in August, marking a 6.9% annual decline with 37,504 units sold. While the national average sale price rose slightly to $668,219, the Home Price Index dropped 3% year-over-year. A 3.3% increase in new listings pushed the sales-to-new listings ratio down to 49.1%.

In British Columbia, residential sales decreased 4.7% year-over-year in August, with 5,653 properties sold. The average provincial home price declined to just under $925,000. Regional results varied, with the South Peace River region seeing a nearly 35% increase while the Okanagan region experienced a 22% decline. The British Columbia Real Estate Association described the broader trend as a gradual recovery since January.

Economists attribute the slowdown to rising economic uncertainty and higher mortgage rates. Market data indicates a 60% probability that the Bank of Canada will raise its benchmark rate from 2.25% in October due to energy price increases and climbing global bond yields. Analysts noted that the broader economic environment is now characterized by rising inflation risks and doubts regarding the durability of recent economic growth.