Home sales in Canada edged up by 0.7% from March to April, the first increase in six months, said National Bank of Canada.
The improvement in sales during the month was mainly driven by an increase in transactions in Ontario (+4.3%), and to a lesser extent by increases in Prince Edward Island (+16.6% following a 17.0% decline the previous month) and Alberta (+3.6%), noted the bank.
On the other hand, sales declined in the vast majority of provinces, with decreases in Nova Scotia (-10.9%), Newfoundland (-7.4%), Quebec (-2.9%), Saskatchewan (-2.5%), New Brunswick (-1.5%), Manitoba (-1.1%), and British Columbia (-1.1%).
Despite the improvement in sales in April, the level of activity remains particularly low in the Canadian housing market, with transactions down 16.9% from their 10-year average, stated National Bank. Several factors continue to weigh on the real estate market, including population decline, the weak performance of the labor market since the start of the year, and economic uncertainty -- and now geopolitical uncertainty as well.
The conflict in the Middle East has even had spillover effects on the Canadian real estate market, with mortgage rates rising over the past two months as bond yields increased due to the rise in inflation anticipated by the markets.
Looking ahead, a pickup in activity could be possible later this year if the trade uncertainty surrounding the renewal of the CUSMA trade deal is resolved, added the bank.
In the meantime, activity levels during the peak spring season are likely to remain low.