Canadian Home Sales Drop; What's Holding Buyers Back?
NOTE: I want to emphasize that the article below refers to the Canadian market, not just Durham Region and the GTA. However, it’s good to look at the market from a national perspective every now and then. If you would like to get up-to-date local market stats and trends, I have a monthly newsletter I’ve been sending to my clients for about 25 years now called Market Watch. You can request to be added to this list by calling my assistant Ginette or myself at 905-683-7800.
Thanks,
Brian
By Matt Day for REALTOR.ca
It appears Canadian home buyers have hit the snooze button on coming out of hibernation.
When comparing the amount of homes sold in April to March, the number of transactions was down 1.7%.
When looking at year-over-year comparisons, home sales were up 10.1% in April 2024 compared to April 2023, but as always, it’s important to remember year-over-year comparisons offer good reference points, while month-over-month comparisons are good for analyzing trends.
So, before we look at what’s leading to the current trends, let’s do a bit of a recap of how we got here:
• Buyers suddenly emerged, which led to price growth not seen since the middle of 2020 to early 2022.
• The Bank of Canada then hiked rates twice in the summer of 2023, which effectively halted the growth.
• The Bank of Canada has been explicit it does not want to see that type of home price growth again.
Why Did Home Sales Decline in April?
A frenzied market was a lot less likely this year because “we have a healthier supply of listings on the market,” according to Shaun Cathcart, Senior Economist of the Canadian Real Estate Association (CREA) in the latest CREA Housing Market Report (available to watch below).
“We have 30,000 more listings at this time this year than we did last year and new listings are totally back to normal levels at this point,” Cathcart said. April’s national sales-to-new listings ratio was down to 53.4%, indicating a “balanced” market that’s below the long-term national average of 55%.
What may be happening, he states, is that many prospective Canadian home buyers have taken an “I’ll believe it when I see it” stance when it comes to declining interest rates, which may not be on the horizon until late July.
So, the theory is even though there are more homes on the market, Canadian home buyers are holding back compared to last year, possibly until they are confident interest rates are on their way down.
Canadian Home Prices Remain Mostly Unchanged
More homes and less sales helped keep prices cool in April. CREA stated slower sales amid more new listings resulted in a sharp 6.5% jump in the overall number of properties on the market, yet the national composite MLS® Home Price Index (HPI)—the most advanced and accurate tool to gauge a neighbourhood’s home price levels and trends—was the same in April compared to March.
“The increase in listings is resulting in the most balanced market conditions we’ve seen at the national level since before the pandemic,” said James Mabey, the newly appointed Chair of CREA’s 2024-2025 Board of Directors. “Mortgage rates are still high, and it remains difficult for a lot of people to break into the market but, for those who can, it’s the first spring market in some time where they can shop around, take their time and exercise some bargaining power.”
The not seasonally adjusted National Composite MLS® HPI dipped 0.9% on a year-over-year basis, the first decline since last July. “This mostly reflects how prices took off last April, something that has not yet been repeated in 2024,” CREA stated in its monthly report.
The actual national average home price was $703,446 in April 2024, down 1.8% from April 2023.
When it comes to trying to navigate the home buying or selling process in these conditions, Mabey has a piece of advice: “Market conditions vary across the country, so if you’re thinking about buying or selling a home this year, you should contact a REALTOR® in your area today.”
Matt Day article was initially published on REALTOR.ca. You can find it by clicking here.
| REALTOR.ca is the most popular and most trusted real estate website in Canada. Owned and operated by the Canadian Real Estate Association (CREA), REALTOR.ca provides up-to-date and reliable information that makes finding your dream property easy and enjoyable. REALTOR.ca is popular with sellers, buyers, and renters and is accessible online and on mobile devices. |
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About the Author Matt Day brings his experience as a nationally-recognized multimedia journalist to the Canadian Real Estate Association as a Communications Advisor. Matt provides professional writing, digital media and communications support to CREA and assists in developing engaging social media content. He is regularly featured in the CREA Café where he provides interesting and entertaining content for REALTORS® to enjoy. In his spare time, you can find him riding bikes or playing guitar. |
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Brian Kondo
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The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
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905-426-7484 direct
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