Canadian home sales showing signs of recovery

Following a weak second half of 2023, home sales over the last two months are showing signs of recovery, according to the latest data from the Canadian Real Estate Association (CREA).

Home sales activity recorded over Canadian MLS Systems rose 3.7 per cent between December 2023 and January 2024, building on the 7.9-per-cent month-over-month increase recorded the month prior. While activity is now back on par with 2023’s relatively stronger months recorded over the spring and summer, it begins 2024 about nine per cent below the 10-year average.

Renewed competition

“Sales are up, market conditions have tightened quite a bit, and there has been anecdotal evidence of renewed competition among buyers,” says Shaun Cathcart, CREA’s senior economist. “However, in areas where sales have shot up most over the last two months, prices are still trending lower. Taken together, these trends suggest a market that is starting to turn a corner but is still working through the weakness of the last two years.”

National gains were once again led by the Greater Toronto Area (GTA), along with Hamilton-Burlington, Montreal, Greater Vancouver and the Fraser Valley, Calgary and most markets in Ontario’s Greater Golden Horseshoe and cottage country.

The actual (not seasonally adjusted) number of transactions came in 22 per cent higher than January 2023, the largest year-over-year gain since May 2021. However, with current activity still running at below-average levels, the double-digit gain was more reflective of the base effect from the comparison to January 2023, which was the worst start to almost any year in the past two decades.

Pent-up demand

“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,” says Larry Cerqua, chair of CREA. “There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023, so if you’re hoping to buy or sell a property in 2024, contact a realtor in your area and get your game plan ready today.”

The Aggregate Composite MLS Home Price Index (HPI) fell by 1.2 per cent on a month-over-month basis in January 2024. This represents an acceleration from the 1.1-per-cent decline recorded in December. Price declines have been predominantly located in Ontario markets, particularly the Greater Golden Horseshoe and, to a lesser extent, BC.

The Aggregate Composite MLS HPI was up 0.4 per cent on a year-over-year basis in January 2024, little changed from readings over the last six months (0.4 to 1.1 per cent).