Spring – and housing market activity – has sprung

Spring has sprung – by calendar if not by weather – and activity in the real estate market is also marking the change in seasons.

This time of year is usually “busy season” in real estate, but very little about the last couple years can be considered typical. Housing supply, interest rates, inflation, government policy and other issues have been causes for concern. But as early as February, we could see there was relief on the horizon.

More favourable conditions

A pause in interest rate hikes from the Bank of Canada (BoC) – more so anticipation of declines as early as spring – and growing pent-up demand signaled that homebuying conditions were becoming more and more favourable.

And sure enough, on March 18, the Canadian Real Estate Association (CREA) confirmed that Canadian home prices in February were flat on a month-over-month basis, ending a streak of five declines that began last fall.

“After two years of mostly quiet resale housing activity there’s a feeling that things are about to pick up,” says Larry Cerqua, chair of CREA. “At this point, it’s hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they’re just waiting for the spring listings to hit the market.”

And more good news came on March 19, when Statistics Canada reported that inflation continues to ease, falling to 2.8 per cent in February – further stoking hopes that interest rate declines are not far off.

CREA’s assessment, however, is mostly on a national level, but as we often remind in HOMES magazine, real estate is not national. There is no one Canadian market. Indeed, conditions can vary by province, region, city, neighbourhood and even street.

Brighter forecast

More locally, the Toronto Regional Real Estate Board (TRREB) reports GTA home sales and new listings were up on an annual and monthly basis in February 2024, while selling prices also edged upward compared to a year earlier. TRREB cites population growth and a resilient regional economy as key to supporting overall demand for housing.

“We have recently seen a resurgence in sales activity compared to last year,” says TRREB President Jennifer Pearce. “The market assumption is that the Bank of Canada has finished hiking rates. Consumers are now anticipating rate cuts in the near future.”

In its most recent BoC interest rate announcement on April 10, the Bank held its overnight rate target at five per cent, leading to speculation that a decrease might not happen till June. As we edge further into spring and temperatures and market conditions warm up, a brighter forecast could be just weeks away.