Canada’s housing market saw buyers return last month only to be met with a lack of supply, according to new home sales data.
This made for the tightest conditions the housing market has seen in a year.
The latest release from the Canadian Real Estate Association (CREA) on Friday showed that national home sales were up 1.4 per cent month-to-month, following an increase of the same size in February.
After a year of cooling in the national housing market tied to the rapid rise in interest rates from the Bank of Canada, March and February marked the first back-to-back monthly gains in sales activity in more than a year, CREA said.
“As the spring market heats up and it looks as though some buyers are coming off the sidelines, it’s important to remember that the intense market conditions of recent years have not gone anywhere, they’ve just been on pause,” said Jill Oudil, chair of CREA, in a statement.
Sale prices, as tracked by CREA’s benchmark home price index, were up 0.2 per cent month-to-month despite being down 15.5 per cent year-over-year.
The actual, not seasonally adjusted average price of a home in Canada was $686,371 last month, down 13.7 per cent from March 2022 but roughly $75,000 higher than levels seen in January. CREA said the rise in prices from the start of the year is largely tied to an uptick in the Greater Toronto Area and B.C.’s lower mainland.
CREA said that “with few exceptions,” prices are no longer falling in Canada, though they’re not really rising, either.
Oudil said that sales are “trending up” and home prices are “stabilizing” across the country with the Bank of Canada’s rate hikes remaining on hold in the last two decisions.
But while buyers are coming off the sidelines, a lack of new listings is driving competition in a tight spring market.
New listings are still at 20-year lows, CREA noted, with the sales-to-new listings ratio rising to 63.5 per cent — the tightest the market has been in a year. The long-term average for this figure is 55.1 per cent, the agency said.
In a separate forecast released Friday, CREA said it expects the average price of a home to end the year 4.8 per cent lower than 2022, but says prices will rise by roughly the same amount in 2024.
The association’s prediction amounts to an average price of $670,389 this year and $702,214 next year, when prices are expected to increase by 4.7 per cent.
CREA’s forecasts are at odds with an updated outlook that brokerage Royal LePage released Thursday, which called for home prices to end the year 4.5 per cent higher than 2022.
CREA also foresees home sales falling 1.1 per cent to 492,674 this year and then rising 13.9 per cent to 561,090 in 2023.
It says the forecast accounts for little change in month-over-month sales seen since summer 2022 and the modest monthly gains recorded in February and March.
— with files from the Canadian Press
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