We are back from a brief holiday hiatus and there are a few things to update.
Home sales and prices both continued downward according to the Canadian Real Estate Association. Sales dipped 0.9% compared to October and year-over-year figures showed the same decline. Prices came down 1.6% month-over-month, but the national average price is 2.0% higher than a year earlier, at just under $657,000. CREA's preferred measure of pricing, the MLS Home Price Index, showed a 1.1% decline from October, with a 0.6% increase compared to November of '22. The sales-to-new listings ratio continued to tighten as well. The number of newly listed homes fell 1.8% month-over-month in November. The pace of new housing starts dropped 22% according to Canada Mortgage and Housing Corporation.
The economy as a whole is also sluggish. Gross Domestic Product numbers for the third quarter showed a 1.1% contraction, year-over-year. But StatsCan made an upward revision to the Q2 numbers and a technical recession was avoided. Q2 showed a 1.4% increase. All in all it was enough to keep the Bank of Canada on the sidelines. The central bank held its Policy Rate at 5.0% for a third straight setting. Now market watchers have their sights set on the horizon, looking for signs of interest rate cuts.
Competition in the mortgage market may have diminished. The federal finance minister Chrystia Freeland has approved RBC's takeover of HSBC. The $13.5 billion dollar deal is expected to close sometime in the first quarter of this year. Well known mortgage commentator Rob McLister calls it a sad day for mortgage customers. He calls HSBC an "everyday, low-cost lender" that gave borrowers some "leverage" against the big banks.