After five consecutive months of declines, Canada's home prices saw their first month of no change in February, according to a new report from the Canadian Real Estate Association (CREA).
This marks a significant change from the 1.3% drop that was seen in January. CREA also notes that their seasonally adjusted Aggregate Composite MLS Home Price Index — the measure used to determine these sale prices — is typically stable and that "shifts this abrupt are exceedingly rare" with only three other times in the last 20 years where there has been a sudden increase of this size in the month-over-month percentage change.
“It’s looking like February may end up being the last relatively uneventful month of the year as far as the 2024 housing story goes,” said Shaun Cathcart, CREA’s Senior Economist. “With so much demand having piled up on the sidelines, the story will likely be less about the exact timing of interest rate cuts and more about how many homes come up for sale this year.”
Of course, the direction of prices varied when looking on a local level. In BC's Fraser Valley and Victoria, prices were down 0.9% month over month, while Vancouver saw prices tick down slightly, by 0.5%. Ontario's Niagara Region saw prices fall by 1.7% month over month while in Ottawa they slipped by 1.1%.
Other regions saw substantial growth, like the Quebec City region where prices jumped 3.8%, and all regions of Saskatchewan surveyed by CREA saw prices increase by more than 2%. In Toronto, prices remained relatively flat (+0.2%) as they did in both Calgary (+0.3%) and Edmonton (+0.1%). Vancouver saw no change in prices at all month over month.
These price changes came as sales trended downwards once again on a national scale, falling 2.7% month over month across 26 national real estate boards. The biggest drop was seen in the Greater Toronto Area where sales plummeted by 11.9%, followed closely by the Kitchener-Waterloo region (-10.6%) and the Fraser Valley (-9.1%). Greater Vancouver saw sales drop by a substantial 7.5%.
Despite these declines, CREA Chair Larry Cerqua says that more activity is expected soon as buyers who have been on the sidelines start to come back to the market.
“After two years of mostly quiet resale housing activity there’s a feeling that things are about to pick up,” Cerqua said. “At this point, it’s hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they're just waiting for the spring listings to hit the market."
For those entering into the market, there are slightly more options, with new listings up 1.6% month over month. As sales dropped and listings grew, the sales-to-new-listings ratio eased to 55.6%, still in balanced market territory. But at the end of the month, there was 3.8 months of inventory left on a national basis, down from the long-term average of about five months of inventory.
