(Bloomberg) -- Canada's housing market posted its fourth month of sales declines as the number of people looking to sell their homes saw a precipitous decline despite prices near record levels.
Transactions fell 3.5% in July, with new listings dropping 8.8%, according to data released Monday from the Canadian Real Estate Association. That caused the national average home price to rise 0.3% to around C$669,200 ($532,600), while the ratio of sales to new listings, a measure of market tightness, rose to 74% from 70% the previous month.
Since the pandemic caused a buying frenzy in Canada that sent sales and prices to record heights in March, the market has been steadily cooling off as prospective buyers contend with a dearth of new houses for sale. Though increasing vaccination rates have begun to bring a return to normal life in Canada, that's left the country to contend with one of the developed world's most severe housing shortages and little prospect of much new supply becoming available soon.
“We are not returning to normal, we are only returning to where we were before Covid, which was a far cry from normal,” Shaun Cathcart, the national real estate board's senior economist, said in a press release accompanying the data. “The problem of high housing demand amid low supply has not gone anywhere -- it's arguably worse.”
The decline in listings was seen across Canada's major cities, including Toronto, Montreal and Vancouver, with new supply down in about three quarters of the country's markets, the data show. But despite this tightening, and the resulting drop in activity from the previous month, July home sales were still well above the average from the last 10 years.
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