Canadian Home Sales Experience September Slowdown
The latest statistics released by the Canadian Real Estate Association (CREA) indicate that national home sales have eased on a month-over-month basis in September 2023. Here are the key highlights from the report:
- Decline in Sales: National home sales witnessed a decline of 1.9% month-over-month in September.
- Year-over-Year Activity: The actual (not seasonally adjusted) monthly activity was 1.9% higher compared to September 2022.
- New Listings Surge: The number of newly listed properties surged by 6.3% on a month-over-month basis.
- Home Price Index (HPI): The MLS® Home Price Index (HPI) edged down by 0.3% month-over-month but showed a 1.1% year-over-year increase.
- National Average Sale Price: The actual (not seasonally adjusted) national average sale price increased by 2.5% year-over-year in September.
September marked the third consecutive month of declining home sales, with this drop being less pronounced than in August. Local market variations were observed, with Greater Vancouver and the Greater Toronto Area (GTA) experiencing declines, while Edmonton, Montreal, and the Kitchener-Waterloo region reported gains.
The report highlights that the recent trend of slowing sales and increasing new listings presents an opportunity for buyers. However, many potential buyers are cautiously waiting for further evidence that interest rates have reached their peak. This, combined with the fact that most sellers are not under immediate pressure to sell, is likely to keep the market on the slower side until the next year.
The housing market has shown a quick settling down following a brief rebound in sales and prices in the spring. The uncertain interest rate landscape and the cost of borrowing money will continue to influence buyer sentiment.
New listings have seen a substantial increase, rising about 35% from their 20-year low in March. The national sales-to-new listings ratio has eased, falling below its long-term average, and there are 3.7 months of inventory at the national level.
While there was a small decline in prices at the national level in September, it was primarily due to trends in Ontario. Prices are still rising across other provinces, albeit at a slower pace. The coming months will determine whether Ontario’s situation is an outlier or the beginning of a broader trend of price softening, considering the prevailing interest rate conditions.
The report emphasizes that year-over-year price comparisons are expected to rise due to the base effect resulting from declining prices in the latter half of the previous year.
In summary, the Canadian housing market in September showed signs of slowing sales and a more balanced supply of new listings. The real estate landscape continues to be influenced by interest rates and evolving buyer sentiments.
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