Instability persists in the Canadian housing market, but analysts say there are signs things may start to normalize in the coming months.
The Canadian Real Estate Association reports that February home sales fell 40% compared to their peak in February of last year, just before the Bank of Canada started raising its trend-setting Policy Rate. Prices, compared to a year earlier, dropped nearly 19%.
The national average home price now stands at a little more than $662,000. With the busiest and most expensive markets – Toronto and Vancouver – calculated out of the equation the average price falls by almost $135,000 to about $527,000.
While that might seem gloomy, market watchers are taking encouragement from the month-over-month figures in the CREA report.
“The similarities between 2023 and the recovery year of 2019 continued to emerge in February, with sales up, the market tightening, and month-over-month price declines getting smaller,” said Shaun Cathcart, CREA’s Senior Economist.
Between January and February home sales rose by 2.3%. Sales for the month are now, roughly, comparable to the period in the pre-pandemic years, 2018 and 2019.
The average price popped up by $50,000 between January and February, the first monthly increase in half a year. Much of that was driven by activity in the Toronto and Vancouver areas.
The market tightening is evidenced by a nearly 8% decline in new listings for the period.