Yahoo Finance Canada real estate: Buyers get more options while prices break more records
Canada's real estate market gave buyers more options in February but demand quickly gobbled up supply, pushing prices to new record highs.
The Canadian Real Estate Association (CREA) says home sales rose 4.6 per cent in February compared to January, which it chalks up to a rebound in new listings. Sales were 8.2 per cent below the record set in February 2021, but still the second-busiest February on record led by Calgary and Edmonton.
New listings rebounded 23.7 per cent month-over-month after falling 10.8 per cent in January. The Greater Toronto Area (GTA), Calgary, and the Fraser Valley were key contributors.
Real estate in the coming months
CREA says the February uptick in supply is similar to 2020 and 2021.
"In the short term, expect at least one more month of stronger sales as the majority of those new listings came onto the market near the end of the month, so many of the associated sales likely won't happen until early March," said CREA's senior economist Shaun Cathcart.
"Ideally, listings will continue to come out in big numbers in the months ahead. Combined with higher interest rates and higher prices, we could be at a turning point where price growth begins to slow down and inventories finally begin to recover after seven years of declines."
Meanwhile, prices continue their upward trajectory. National home prices rose a record 3.5 per cent month-over-month in February and a record 29.2 per cent year-over-year.
Ontario, New Brunswick, and Nova Scotia prices were a little higher than the national average. Quebec and Prince Edward Island were slightly below.
The effects of higher interest rates
The Bank of Canada has started raising rates and has signalled more are coming, which have historically put a damper on housing market enthusiasm.
"The Canadian housing market is running headlong into higher interest rates, and the next few months could be telling," said BMO senior economist Robert Kavcic.
"Fundamentally, it will still take a number of months for variable rates to rise enough to bite, and for low-rate pre-approvals to roll off. But sentiment can change in a hurry."
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.
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