Yahoo Finance Well that didn’t last long. Canadian housing is a seller’s market again.
Buyers are facing more competition as they fight over a dwindling number of listings
The Canadian housing market is back in familiar territory as fierce competition between buyers for too-few listings is becoming the norm once again.
The sales-to-new listings ratio jumped to 63.5 per cent in March, the “tightest market in a year,” according to the latest data from the Canadian Real Estate Association (CREA), as new listings dropped and sales rose.
The long-term average for this ratio is 55.1 per cent, CREA says.
National home sales posted a small increase of 1.4 per cent in March from February, marking the first back-to-back monthly gain in more than a year, the data showed.
Meanwhile, new supply is hovering at a 20-year low. The number of newly listed homes for sale fell a further 5.8 per cent month-over-month.
It’s been a wild ride for the Canadian housing market over the past year. A massive jump in interest rates put a chill on real estate activity but it appears some buyers are wading back into the market, and finding there's not much to bid on.
“As the spring market heats up and it looks as though some buyers are coming off the sidelines, it’s important to remember that the intense market conditions of recent years have not gone anywhere, they’ve just been on pause,” Jill Oudil, CREA’s chair, said in a press release on Friday.
“With buyers re-entering a market with historically low supply, homes are not only selling but selling faster.”
The not-seasonally adjusted average national home price in March was $686,371, according to CREA. While that was down 13.7 per cent compared to the same time last year, it was up about $75,000 the average price in January this year. The country’s most expensive markets, Greater Toronto and Greater Vancouver, drove the price increases.
CREA sees smaller decline in home prices
The association also released an updated forecast for sales activity and prices on Friday.
It expects home sales to decline 1.1 per cent this year from 2022, compared to its previous forecast for a 0.5 per cent fall back in January.
The main factors behind the revision were a weaker-than-expected first quarter for Alberta home sales, partially offset by a stronger start to the year in Ontario.
“National home sales have remained little changed from month to month since the summer of 2022 and, in fact, posted modest back-to-back monthly gains in February and March 2023. With nearly a year without any large declines, the downward adjustment to sales activity from rising interest rates and high uncertainty looks to be in the rear-view mirror,” it said in the release.
CREA also now sees the average national home price falling 4.8 per cent this year to $670,389, compared to its previous forecast of a 5.9 per cent decrease, thanks to outsized price gains in Toronto and Vancouver.
Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.
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