Two new data reports are pointing to a growing level of stability in Canada’s homeownership market.
The aggregate price of a home in Canada during the first quarter of this year was $778,300, according to the latest Royal LePage House Price Survey. This represents a 9.2% year-over-year decline. On a quarter-over-quarter basis, the aggregate price of a home in Canada was up by 2.8%.
When viewed by housing type, the national median price of a single-family detached home declined 10.7% cent year-over-year to $808,700, while the median price of a condominium dropped 6.7% year-over-year to $571,700. Quarter-over-quarter, median prices for these two property segments were up 3.4% and 1.8%, respectively.
“There has been nothing ‘typical’ about Canada’s housing market since the start of the Covid-19 pandemic,” said Phil Soper, president and CEO of Royal LePage. “Lockdowns brought the housing market to a grinding halt in early 2020 before the work-from-home revolution catapulted it into a two-year, all-season frenzy of record sales volumes and aggressive price growth.”
“As markets do,” Soper added, “this market overshot, and the inevitable correction was triggered when the Bank of Canada began to rapidly raise interest rates. The downturn came swiftly, and the real estate industry remained depressed for twelve months, a longer correction than the aftermath of the financial crisis thirteen years ago. We have turned the corner and the housing economy is growing again; none too soon for many buyers, who have been waiting patiently for prices to bottom out.”
Separately, the Canadian Real Estate Association (CREA) reported home sales recorded over Canadian MLS Systems were up by 1.4% from February to March; As sales were also up in February, this marks the first back-to-back monthly gains in more than a year. However, the number of newly listed homes dropped 5.8% on a month-over-month basis in March, and the new supply is currently at a 20-year low. There were 3.9 months of inventory on a national basis at the end of March, down from 4.1 months at the end of February and the lowest level since last October.
CREA Senior Economist Shaun Cathcart expressed cautious optimism about the housing sector.
“The 2023 spring housing market is getting going after a tough 2022, and the green shoots continued to pile up in March,” said Cathcart. “Sales are trending up, markets have tightened considerably, the Bank of Canada is on hold, and the MLS Home Price Index is stabilizing across the country. That said, the supply issue is still with us. New listings are at 20-year lows.”
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