Home sales in Canada barely budged in November, but the Canadian Real Estate Association (CREA) predicts the market will recover in the spring after a “holding pattern” until 2026.
The number of homes sold in November fell 0.6 percent from October, while non-seasonally adjusted monthly activity fell 10.7 percent from November 2024, according to CREA monthly data released Monday.
House prices also fell, with CREA reporting a 0.4 percent decline in its house price index from October to November. The average national home price was $682,219 last month, a decline of two percent from 2024.
“At this point, it looks like the mid-year housing demand rally has entered more of a holding pattern until 2026,” said Shaun Cathcart, senior economist at CREA.
In an interview, Cathcart said the market has “simply been at the same level” since mid-summer, with a few small declines, including the one in November.
The year started with a “pretty good rally” from March to about July, he said, and then the gains tapered off.
“This was supposed to be a recovery year until the tariffs came along and kind of ripped the rug out from under the spring market,” Cathcart added.
Still, he noted that this does not mean the market is declining. It is still at its highest level all year, although the rally has slowed.
It also appears that sellers made some price concessions in November to get deals done before the end of the year, Cathcart said.
While it's normal for prices to gradually fall again as some of the supply extends into the second half of the year, the slight decline in November on a seasonally adjusted basis was “beyond regular seasonality,” he said.
As for the new year, Cathcart said all the ingredients are in place for a decent rally in the spring.
“Our forecast is that the upward trend will continue in the spring. There will be a lot of offers appearing,” he said.
For one thing, Cathcart believes that the Bank of Canada's explicit communication that interest rates are as good as they're going to get will push Canadians who have been waiting for better rates to get back into the market and take out their five-year fixed-rate mortgages.
Another factor he points to is the 25- to 35-year-old cohort, which represents the largest demographic group the country has ever had: 85 percent say they want to become homeowners.
“I've never seen as much pent-up demand as we have now. I've never seen population growth this much, I've never seen such a large cohort of first-time buyers and I've never seen a four-year period where it was quiet and people weren't able to really make a difference,” he said.
“So I think all the ingredients are there to bring this thing back to life at a higher level than the last four years. And we'll have to wait and see.”
• Email: dpaglinawan@postmedia.com