In March, existing house sales and average prices increased on a monthly basis while housing supply continued to shrink.
According to the most recent data from the Canadian Real Estate Association, there was a seasonally adjusted increase of 1.4% from one month to the next. That comes after a 1.5% increase in February, the first back-to-back growth since the start of the housing slump. Nevertheless, resales in March were still very close to their lowest point in more than 13 years.
British Columbia saw a 10% increase in sales, which was the main contributor to the gains. Other provinces, such Ontario (+1.1%), Manitoba (+1.2%), and Quebec (+0.8%), saw more modest growth.
For the second consecutive month, the national average price increased to a non-seasonally adjusted $686,371. Despite the fact that average prices have already increased by about $75,000 since January, CREA stated that this is still a 13.7% decline from the same time last year.
As new listings drop, inventory levels are at a 20-year low
With only 3.9 months of available housing, according to CREA, the market’s supply of homes continues to decline. That has dropped from 4.1 in February and is currently back at its lowest point since October.
According to CREA, the number of new listings fell by 5.8% month over month and hit a 20-year low. Sales-to-new-listings ratio increased to 63.5%, eight points over its long-term average, according to CREA, as new listings decreased and sales increased.
Sellers “have yet to emerge from hibernation,” according to Robert Hogue of RBC. In fact, if there were more houses for sale, the Canadian housing market might now be busier. The demand-supply situation has become tighter as a result of consecutive declines in inventories, putting more purchasers against one another in bidding wars in some areas of the country (such as Toronto and Vancouver).
Home price roundup around the nation
Are there any trends in the March data?
Two months’ worth of data, according to analysts, is insufficient to identify a longer-term trend, but they do highlight underlying elements that are strengthening the case for a home market recovery in Canada.
While rises in four of the previous six months are starting to resemble a trend, two consecutive monthly increases in seasonally adjusted home sales do not constitute a trend, according to Randall Bartlett, Senior Director of Canadian Economics with Desjardins Group.
“There is no question that rapid population growth and a competitive labour market have contributed to the stabilisation of the housing market,” he continued. However, high financing rates continue to be a barrier, especially for first-time homebuyers.
Hogue too thinks that the housing market bottom is now within reach.
