The Canadian housing market appears to be facing the harsh reality of the current interest rate situation, as the Canadian Real Estate Association (CREA) reports a decline in home sales in October 2023. Today, we will delve into the key data points and trends observed during this period.
Sales Performance
Canadian home sales have continued their downward trajectory, following a brief period of hope earlier this year when sales started to align with the 10-year moving average. While a slight increase of 0.9 percent in sales compared to last year, the number of homes sold in October plummeted by 5.6 percent compared to September’s sales figures. However, compared to October 2022, prices have increased by around 1.1 percent, indicating that the market has not reached the extreme lows witnessed during last year’s selloff.
Shift Towards Buyers’ Market
October witnessed the Canadian real estate market continuing its shift towards a buyers’ market, with the sales-to-new listings ratio hitting a 10-year low at 49.5 percent. This signifies an increasing number of properties available relative to their demand. Furthermore, the months of inventory nationally rose to 4.1 months, a notable increase from the low of 3.1 months recorded in May.
Financial Strain on Canadians
The continuous surge in new listings surpassing the declining sales suggests that financial stress has started to impact households across Canada. Many homeowners are selling their properties to alleviate this strain on their finances.
Conclusion
In summary, the Canadian housing market struggled in October 2023, with sales declining and prices following suit. The market appears to be heading towards a buyers’ market, signalling a shift in the balance of power. The increase in new listings and the financial strain experienced by Canadians are clear indicators of the challenges faced in the current housing landscape. It will be essential to monitor these trends closely in the coming months to understand the long-term implications for the Canadian real estate market.
-Brad
