Canadian Home Sales Surging, Prices Once Again on the Rise

Much like your garden, Canadian home sales are “definitely in bloom now,” according to the Canadian Real Estate Association’s (CREA) Senior Economist Shaun Cathcart.

From March to April, national home sales surged a notable 11.3%—a rare double-digit spike in property sales month-over-month.

“If you look back over the last couple decades, it’s really only the rebounds coming out of the financial crisis (2009), and then after the initial few months of COVID-19 (2020), that saw bigger month over month sales gains,” Cathcart said during CREA’s Housing Market Report.

How do home sales compare to last April?

If we compare year-over-year data, sales activity is down 19.5%, but the difference here is April 2023 marked the third straight month of increasing home sales. Remember, you only have to look back at January’s data to see how far we’ve come. At the beginning of 2023, January home sales had hit a 14-year low, totaling just under 21,000 units sold for that month. The latest data from CREA shows there were 44,000 units sold across Canada in April.

“Over the last few months, there have been signs that housing markets were going to heat back up this year, so it wasn’t a surprise to see things take off after the Easter weekend, which often serves as the opener to the spring market,” said Larry Cerqua, CREA’s 2023-2024 Chair. “The issue going forward is not new: demand is once again returning at a scale that is outpacing supply.”

What’s supply got to do with it?

Supply, as Cerqua references, remains sluggish. April saw a 1.6% month-over-month growth in newly listed properties across Canada, even though supply levels remain at 20-year lows.

These two factors—low supply yet increasing home sales—combined with stagnating interest rates that help increase home buyer confidence, have resulted in price jumps across the country.

“It was always clear that if buyers were going to jump back into a market that was still undersupplied that prices would act accordingly and that’s exactly what happened in April,” Cathcart said during the Housing Market Report.

What about home price trends?

The actual (not seasonally adjusted) national average home price was $716,000 in April 2023, down 3.9% from April 2022, but up $103,500 from January 2023.

The MLS® Home Price Index—the most advanced and accurate tool to gauge a neighbourhood’s home price levels and trends—edged up 1.6% from March to April and gains were broad-based. A monthly increase in prices from March to April was observed in the majority of local markets, so chances are wherever you’re reading this from in Canada, home prices have gone up in your neighbourhood.

“It’s not pandemic level growth,” Cathcart mentioned, “but there also isn’t much else in history that’s all that much stronger either.”

SOURCE: REALTOR.CA