Canadian national home sales in December may have caught some market watchers by surprise, rising above November’s sales numbers, says the year-end report from the Canadian Real Estate Association (CREA)..It was a small increase of 1.3%, but only the second month-over-month increase since the Bank of Canada began increasing its overnight rate, and mortgage rates, last spring..On the downside, national sales in December came in 39.1% below the record number of sales recorded in December 2021. Moving forward, expect to see year-over-year sales declines of that magnitude, or slightly lower, for the better part of the first half of 2023..“In 2022, we saw one of the biggest single-year shifts on record in Canadian housing activity, from record highs last winter to just below the 10-year average at the end of the year,” says Jill Oudil, chair of CREA..“That said, the market’s adjustment to higher rates may be mostly in the rear-view mirror at this point.”.“That could start to bring buyers back off the sidelines this spring.”.The Aggregate Composite MLS Home Price Index (HPI) edged down 1.6% on a month-over-month basis in December 2022, continuing the trend that began last spring..The national HPI, at $626,318, was about 13% below its peak level and down 12% from December 2021. The national price is heavily influenced by prices in Greater Vancouver and the Greater Toronto Area. Excluding these two markets from the calculation cuts almost $118,000 from the national average price..Looking across the country, these provinces had aggregate price increases in December 2022 from December 2021: Alberta, from $417,619 to $429,948; Saskatchewan from $315,100 to $316,108; Manitoba from $334,256 to $336,485; New Brunswick from $251,100 to $265,800; Nova Scotia from $348,000 to $369,000; Prince Edward Island from $360,00 to $402,432, and; Newfoundland Labrador from $264,500 to $281,200..In Calgary the price increased year-over-year from $468,300 to $506,400, while it decreased in Edmonton, from $369,500 to $366,600..Provinces recording decreases were: BC from $1,030,554 to $907,456; Ontario from $924,755 to $812,338, and; Quebec from $463,191 to $458,792..“The housing market story of 2022 was about high inflation and rising interest rates. The 2023 market will depend on the timing and extent those factors move back in the other direction,” says Shaun Cathcart, CREA’s senior economist..“Demand for housing continues to grow and supply remains the biggest issue across the entire spectrum. Whether that plays out in the rental market in 2023 or shifts back over into the ownership space is a matter of how quickly the Bank of Canada can get inflation under control and starts turning the dial back down on borrowing costs.”.The number of newly listed homes dropped 6.4% on a month-over-month basis in December, led by declines in BC and Quebec. It was among the lowest December new supply levels on record..“With new listings down by quite a bit more than sales on a month-over-month basis, the sales-to-new listings ratio tightened to 54.4% compared to 50.2% posted in November. The long-term average for this measure is 55.1%,” says Cathcart. .“There were 4.2 months of inventory on a national basis at the end of December 2022. This is close to where this measure was in the months leading up to the initial COVID-19 lockdowns, and still nearly a full month below its long-term average.”
Canadian national home sales in December may have caught some market watchers by surprise, rising above November’s sales numbers, says the year-end report from the Canadian Real Estate Association (CREA)..It was a small increase of 1.3%, but only the second month-over-month increase since the Bank of Canada began increasing its overnight rate, and mortgage rates, last spring..On the downside, national sales in December came in 39.1% below the record number of sales recorded in December 2021. Moving forward, expect to see year-over-year sales declines of that magnitude, or slightly lower, for the better part of the first half of 2023..“In 2022, we saw one of the biggest single-year shifts on record in Canadian housing activity, from record highs last winter to just below the 10-year average at the end of the year,” says Jill Oudil, chair of CREA..“That said, the market’s adjustment to higher rates may be mostly in the rear-view mirror at this point.”.“That could start to bring buyers back off the sidelines this spring.”.The Aggregate Composite MLS Home Price Index (HPI) edged down 1.6% on a month-over-month basis in December 2022, continuing the trend that began last spring..The national HPI, at $626,318, was about 13% below its peak level and down 12% from December 2021. The national price is heavily influenced by prices in Greater Vancouver and the Greater Toronto Area. Excluding these two markets from the calculation cuts almost $118,000 from the national average price..Looking across the country, these provinces had aggregate price increases in December 2022 from December 2021: Alberta, from $417,619 to $429,948; Saskatchewan from $315,100 to $316,108; Manitoba from $334,256 to $336,485; New Brunswick from $251,100 to $265,800; Nova Scotia from $348,000 to $369,000; Prince Edward Island from $360,00 to $402,432, and; Newfoundland Labrador from $264,500 to $281,200..In Calgary the price increased year-over-year from $468,300 to $506,400, while it decreased in Edmonton, from $369,500 to $366,600..Provinces recording decreases were: BC from $1,030,554 to $907,456; Ontario from $924,755 to $812,338, and; Quebec from $463,191 to $458,792..“The housing market story of 2022 was about high inflation and rising interest rates. The 2023 market will depend on the timing and extent those factors move back in the other direction,” says Shaun Cathcart, CREA’s senior economist..“Demand for housing continues to grow and supply remains the biggest issue across the entire spectrum. Whether that plays out in the rental market in 2023 or shifts back over into the ownership space is a matter of how quickly the Bank of Canada can get inflation under control and starts turning the dial back down on borrowing costs.”.The number of newly listed homes dropped 6.4% on a month-over-month basis in December, led by declines in BC and Quebec. It was among the lowest December new supply levels on record..“With new listings down by quite a bit more than sales on a month-over-month basis, the sales-to-new listings ratio tightened to 54.4% compared to 50.2% posted in November. The long-term average for this measure is 55.1%,” says Cathcart. .“There were 4.2 months of inventory on a national basis at the end of December 2022. This is close to where this measure was in the months leading up to the initial COVID-19 lockdowns, and still nearly a full month below its long-term average.”
