National home sales were down month-over-month in January by 3 per cent. Newly released statistics from the Canadian Real Estate Association (CREA) show that after December’s small increases in 2022, sales have returned to a downward trend that began last summer, reaching the lowest for this month since 2009.
While there were gains in Hamilton-Burlington and Quebec City, they were offset by declines in Greater Vancouver, Victoria, Vancouver Island, Calgary, Edmonton and Montreal.
The actual number of transactions came in 37.1 per cent below the January 2022. “The big question on everyone’s minds after last year was what will housing markets do in 2023?” said Jill Oudil, Chair of CREA. “We may have to wait another month or two to see what buyers are planning this year since new listings are currently trickling out at near-record low levels, but that should change as the weather warms.”
CREA’s Senior Economist Shaun Cathcart observed how early 2023 feels much like 2019. “In 2019 the market started off slow, as there wasn’t much to buy. It took off once spring listings started to come out,” he said. “With the Bank of Canada increasingly signaling that rates are now at the top, it’s possible the spring market this year could also surprise, particularly in areas where prices have been stable or are now stabilizing.
“Buyers are likely feeling increasingly confident in taking on variable rate mortgages, and 2023 will probably be a good window of opportunity to be able to engage in a calmer home search and buying experience following the intense market conditions of the last few years.”
Home prices
Greater Vancouver and the Greater Toronto Area, two of Canada’s most active and expensive housing markets, influenced the average home price that was $612,204, down 18.3 per cent from last January. Excluding these two markets from the calculation cuts almost $113,000.
Prices are down from peak levels by more than they are nationally in many parts of Ontario and some parts of B.C., and down by less in other places. Overall, prices have softened, but Calgary, Regina, Saskatoon, and St. John’s stand out as markets where home prices are barely off their peaks. An increasing number of East Coast markets show that prices appear to have bottomed out and are now trending up again.
Continuing the trend that began last spring, the home price index was down 1.9 per cent since December 2022. Year-over-year declines are forecasted to hit their highest levels over the next two months compared to the highest price levels on record in February and March of last year.
New listings
New listings remain historically low overall, even with a 3.3 per cent rise led by increases across British Columbia. New supply hit the lowest level since 2000.
With new listings up and sales down in January, sales-to-new listings eased back to 50.7 per cent. This is about where it had been over the entire second half of 2022. The long-term average for this measure is 55.1 per cent.
According to CREA, there were 4.3 months of inventory at the end of January 2023. This is close to where this measure was in the months leading up to pandemic lockdowns, and still close to a month below its long-term average of about five months.
