The Canadian Real Estate Association (CREA) has released new statistics revealing a significant increase in national home sales in May 2023, highlighting a rebound in the Toronto market. The data shows a 5.1% month-over-month surge in home sales across the country, with Toronto and other major Canadian cities experiencing positive growth.
The Greater Toronto Area (GTA), Montreal, Greater Vancouver, Calgary, Edmonton, and Ottawa were among the markets that saw an uptick in sales activity. Approximately 70% of all local markets reported an increase in home sales during this period.
The number of transactions recorded through Canadian MLS® Systems showed a 5.1% boost between April and May 2023, building upon the double-digit surge in April and the smaller gains observed in February and March.
Although the year-over-year sales increase of 1.4% was modest, it is a significant milestone for the Canadian housing market. This marks the first national year-over-year sales growth in almost two years, since June 2021.
“A rebound in housing activity this year was never really in doubt because we knew the demand was there – the only question was around timing and that was answered this spring,” said Shaun Cathcart, CREA’s senior economist. “The 2023 housing puzzle piece that was less obvious was the reluctance of existing owners to take advantage of a slower market to make a move because they don’t want to mess with the ultra-low fixed rates they locked in during the COVID-19 pandemic. Without existing owners supplying the market with new listings, this housing demand rebound may play out more acutely than might have been expected on the price side this year.”
The number of newly listed homes increased by 6.8% on a month-over-month basis in May. However, it is important to note that new supply still remains historically low.
The sales-to-new listings ratio, which compares the number of homes sold to the number of new listings, was 67.9% in May, a slight decrease from 69% in April. The long-term average for this measure is 55.1%.
Inventory levels were also affected, with 3.1 months of inventory available nationally at the end of May 2023, down from 3.3 months in April. This decrease signals a tightening of supply, as inventory has declined by more than a month since its peak in January. The long-term average for this measure is around five months.
The Aggregate Composite MLS® Home Price Index (HPI) demonstrated a notable 2.1% month-over-month increase in May 2023. This surge in prices was observed across various local markets, indicating a broad-based recovery. However, the Aggregate Composite MLS® HPI still remains 8.6% below year-ago levels, though the decline has lessened compared to the earlier months of the year.