The national increase in June home sales suggests activity may be starting to turn the corner. But interest rates remain a threat

Mario Toneguzzi on home prices in Edmonton and CalgaryData released on Monday indicates both Calgary and Edmonton followed different paths than the national one when it came to home prices in June.

The Canadian Real Estate Association in its monthly statistical report found that the benchmark price in Calgary of $431,300 for the month was down 1.05 per cent from a year ago while in Edmonton it dropped by 1.49 per cent to $335,100.

However, nationally the benchmark price rose by 0.9 per cent to $636,700.

The benchmark price is the average price for typical homes sold in a particular market.

Taking a look over time is also interesting.

Nationally, prices had soared by 31.02 per cent from three years ago and 45.74 per cent from five years ago.

In Calgary, prices are down 4.34 per cent from three years ago but up 6.55 per cent over five years.

The same pattern is evident in Edmonton, with prices off by 3.61 per cent from three years ago but 2.84 per cent higher than five years ago.

In June, national home sales through Canadian MLS systems rose 4.1 per cent from May but were down close to 11 per cent from June 2017.

Sales marked a five-year low and stood almost seven per cent below the 10-year average for the month of June.

“This year’s new stress-test on mortgage applicants has been weighing on homes sales activity; however, the increase in June suggests its impact may be starting to lift,” said Barb Sukkau, the association’s president. “The extent to which the stress-test continues to sideline home buyers varies by housing market and price range.”

Gregory Klump, the association’s chief economist, said the national increase in June home sales suggests activity may be starting to turn the corner.

“Even so, the number of homes trading hands has a long way to go before it returns to levels posted in recent years. Looking ahead, home sales activity and price gains will likely be held in check by higher interest rates,” he said.

Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.

home pricesThe views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

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