Home sales across Canadian markets dipped slightly by 0.6 per cent between April and May, remaining a little below the ten-year average. In its latest statistics report for May, the Canadian Real Estate Association noted that the Bank of Canada’s recent rate drop by a quarter-percentage point will likely lead to increased activity in the future.

“The Bank of Canada’s June 5 rate cut may have only been 25 basis points, but the psychological effect for many who have been sitting on the sidelines was no doubt huge,”said Shaun Cathcart, CREA’s senior economist. “The question now turns to further rate cuts – specifically, how fast, and how far?”

New listings were up by 0.5 per cent. By the end of May there were about 175,000 properties listed for sale, up 28.4 per cent from a year-over-year but below historical averages. This has contributed to an increasing number of homes for sale.

“The spring housing market usually starts before all the snow has melted, somewhere around the beginning of April, but this year I believe a lot of people were waiting for the Bank of Canada to wave the green flag,” said CREA ChairJames Mabey. “That first rate cut is expected to bring some pent-up demand back into the market, and those buyers will find there are more homes to choose from right now than at any other point in almost five years.”

Actual home prices have also dropped, but those numbers don’t account for all geographic areas. The national average home price was $699,117 in May, down 4 per cent from a year earlier. In Calgary, Edmonton, and Saskatoon, prices have steadily inched higher since the beginning of last year.