Residential Market Commentary - October sales spark hope

With the release of its October market report the Canadian Real Estate Association is turning its attention to the spring “buying season”.

 

October sales were up slightly, increasing 0.9% over September, but they were down 4.3% from a year earlier.

 

Prices are deemed to be stable.  The MLS Home Price Index (HPI) edged up 0.2% month-over-month but was down 3% on a year-over-year basis.  The national average sale price was down 1.1% on a year-over-year basis, coming in at $690,000 in October.

 

CREA says supply and demand remain in balanced territory.  The sales-to-new listing ratio declined 1.4% in October and now sits at 52.2%.  (45% - 65% is considered balanced.)

 

Those signs have rekindled hopes for an on-going market recovery.

 

“As we head into the quiet winter season, we continue to see clues that underlying demand for housing is picking up steam,” says CREA Chair Valérie Paquin. “All eyes will be on next year’s spring market to see if all that pent-up demand will finally come off the sidelines in a big way.

 

Much of that optimism is fuelled by recent interest rate cuts which the Bank of Canada says are unlikely to continue, for the time being.

 

Market watchers, like prominent housing economist Robert Hogue, see the October sales and price revival as “fragile”.  Other analysts point to continuing trade uncertainty, that could lead to rising unemployment, as central threat to an ongoing real estate recovery.