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CREA says sales are up slightly but are still being outpaced by new listings
Published on Oct 15, 2024 • Last updated 18 hours ago • 3 minutes reading time
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A “For Sale” sign outside a home in Vancouver, BC Photo by Jonathan Hayward/The Canadian Press Files
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National home sales rose slightly in September after the Bank of Canada cut interest rates for the third time this year. This was the third straight month of gains as lower borrowing costs provided additional incentive for buyers. However, sales continued to be outpaced by new listings, resulting in an oversupply of properties on the market.
According to the Canadian Real Estate Association (CREA), home sales recorded through Canadian MLS systems increased 1.9 percent compared to August and reached their highest level since July 2023. Major markets such as the Greater Toronto Area, Hamilton-Burlington, Ontario, Montreal, Quebec City and the Greater Vancouver area saw the largest increases.
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Although the slight increase in sales is notable, industry observers believe the market is in a holding pattern as buyers wait for major changes.
“When you look at the stunning real estate numbers in September, it feels like we're at this moment, just before the starting gun goes off,” said Clay Jarvis, spokesman for financial firm NerdWallet. “The market is abuzz with new offerings, but buyers are still not ready to jump headfirst into gigantic mortgages.”
Property prices remained largely unchanged. The national benchmark home price rose 0.1 percent to $718,200 in September from August, while the seasonally adjusted home price fell 3.6 percent year-over-year. The rate of decline has slowed compared to July and August, when year-on-year declines of 3.9 percent were recorded.
Meanwhile, new listings rose 4.9 percent in September compared to the previous month as more sellers entered the market. That increase pushed the national sales-to-new listings ratio down to 51.3 percent from 52.8 percent in August — a ratio that is still within the range of a balanced market.
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“There was a wealth of new offerings for buyers to choose from in early September before things generally calmed down for the winter,” said CREA chairman James Mabey. “While some buyers may choose to take advantage, others may be inclined to wait, as the majority of future Bank of Canada rate cuts are now expected to occur in a matter of months rather than years.”
As of the end of September, there were 185,427 properties listed for sale across Canada, up 16.8 per cent from 2023 but still below the historical average of around 200,000 listings for this time of year. Inventories declined slightly, totaling 4.1 months of available inventory, compared to 4.2 months in August. The long-term average is 5.1 months, with anything less than 3.6 months indicating a seller's market.
Looking ahead to the market for the remainder of 2024, Shaun Cathcart, senior economist at CREA, noted: “With the pace of rate cuts now expected to be much faster than previously thought, it is possible that some buyers will decide to hold off on buying for now “This could further strengthen the recovery expected in 2025 at the expense of the last months of this year.”
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Robert Kavcic, senior economist at BMO Capital Markets, believes that while rate cuts have provided some relief, the market needs more than just lower rates to gain momentum.
“We continue to move down the path of rate cuts, but it will take more to get the market moving again,” he said.
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