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The national aggregate home price rose again in the second quarter and is expected to increase further by the end of the year, real estate firm Royal LePage said.

The aggregate price of a home in Canada rose 1.9 per cent year over year to $824,300 in the second quarter of 2024, up 1.5 per cent over the first quarter, according to the house price survey Royal LePage released on Thursday.

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The increase comes despite a slowdown in activity in the country’s most expensive markets. Toronto and Vancouver reported slower-than-usual market activity in the spring as inventory grew.

The national aggregate home price remains well above pre-pandemic levels, with the second quarter showing an increase of 30.8 per cent over the same period in 2019, said Royal LePage.

Among major regions, Quebec City recorded the highest year-over-year aggregate price increase, up 10.4 per cent.

“Nationally, home prices rose while the number of properties bought and sold sagged; an unusual dynamic,” said Royal LePage chief executive Phil Soper. “Canada’s housing market is struggling to find a consistent rhythm, as the last three months clearly demonstrated.”

Soper noted that inventory levels in many regions have climbed materially, which he described as the closest it’s been to a balanced market in several years.

Sales activity in the Greater Toronto Area was unseasonably low this spring, said Royal LePage chief operating officer, Karen Yolevski. Almost all of the price appreciation in the region occurred in the first quarter, followed by a virtual flatline.

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New listings are up double digits compared to last year, and active listings are the highest they’ve been in more than a decade, she said.

Yolevski added that activity has slowed across all segments and housing types, not only in the resale market, but in pre-construction as well. 

Despite the Bank of Canada’s move to cut the overnight lending rate last month, buyers did not immediately rush back to the market as initially expected, Royal LePage said.

Soper said that when the first rate cut finally occurred in early June, “market response was tepid.” The quarter-point cut, he said, unsurprisingly didn’t substantially improve the affordability picture.

Further interest rate cuts are required to increase purchasing power and improve consumer confidence, the firm said. Lower rates would mean lower monthly payments, opening the door to some families previously shut out of the market.

Earlier this year, a survey conducted by Leger on behalf of Royal LePage found that 51 per cent of sidelined homebuyers said they would resume their search if interest rates reversed.

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“Once consumers regain the confidence to re-enter the market – likely following several more interest rate cuts – this boost in supply will be a welcome improvement to market conditions,” said Yolevski.

Royal LePage maintained its national year-end forecast, with prices expected to increase nine per cent in the fourth quarter of 2024 compared to the same quarter last year.

Nationally, home prices will see continued moderate price appreciation throughout the second half of the year, the company forecasted.

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