CREA report shows Canadian home sales were up on a monthly basis in February
Canada’s housing market showed signs of life in February following a year of cooling off, but experts are watching the typically busy spring season to determine whether the bottom of the correction has passed.
Home sales recorded over Canadian MLS® Systems posted a 2.3% increase from January to February 2023. Gains were led by the Greater Toronto Area (GTA) and Greater Vancouver.
The actual (not seasonally adjusted) number of transactions in February 2023 came in 40% below an incredibly strong month of February in 2022. The February 2023 sales figure was comparable to what was seen for that month in 2018 and 2019.
The number of newly listed homes was down 7.9 per cent in February compared with a month earlier, CREA said.
The average national sale price was $662,437 last month, down 18.9 per cent from the all-time high in February 2022 — the month that most consider the peak of the frenzied pandemic housing market in Canada.
Without the Greater Toronto and Vancouver markets, however, the average home price would be roughly $135,000 less, the agency said.
“February’s data contained the potential of a more robust market to come, but to repeat the bottom line from last month, we won’t know what the 2023 market has in store until the spring,” CREA chair Jill Oudil said in a statement accompanying the data release. “While we’re not seeing it in the sales or listings data just yet, I would expect homeowners are getting properties ready for the market and prospective buyers are getting mortgage pre-approvals. Make sure to contact your local REALTOR® for information and guidance about buying or selling a property,” continued Oudil.
“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. “But the biggest similarity was a sharp drop in seasonally adjusted new listings. Future sellers, many of whom will also be buyers, are likely biding their time until the optimum time to list and buy something else. For most, that’s in the spring. Will buyers jump off the fence to snap homes up in 2023 once they finally start to hit the market? They did in 2019.”
The number of newly listed homes dropped 7.9% on a month-over-month basis in February, led by double-digit declines in several large markets, particularly in Ontario.
With new listings falling considerably and sales moving higher in February, the sales-to-new listings ratio jumped to 58.4%, the tightest since last April. The long-term average for this measure is 55.1%.
There were 4.1 months of inventory on a national basis at the end of February 2023, down from 4.2 months at the end of January. It was the first time the measure has shown any sign of tightening since the fall of 2021. It’s also a full month below its long-term average.
The Aggregate Composite MLS® Home Price Index (HPI) was down 1.1% on a month-over-month basis in this February, only about half the decline recorded the month before and the smallest month-over-month drop since last March.
The Aggregate Composite MLS® HPI now sits 15.8% below its peak level, reached in February 2022.
Looking across the country, prices are down from peak levels by more than they are nationally in most parts of Ontario and a few parts of British Columbia, and down by less elsewhere. While prices have softened to some degree almost everywhere, Calgary, Regina, Saskatoon, and St. John’s stand out as markets where home prices are barely off their peaks. Prices began to stabilize last fall in the Maritimes. Some markets in Ontario seem to be doing the same now.
This article was reported by CREA.