The spring real estate market is usually characterized by a large upswing in activity from March through June, but according to new statistics it’s more about a drop in home sales.
According to the Canadian Real Estate Association, home sales across the country have dropped by 12.6% on a month-over-month basis in April. That’s during a month where sales, traditionally, are increasing. The drop is the lowest level of activity since the summer of 2020 following the COVID-19 pandemic.
“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, chair of CREA. “For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies.”
Sales were down in 80 per cent of local markets nationwide, including the Greater Toronto Area. Cities such as Victoria, Montreal and Halifax-Darmouth saw sales increase, however slightly.
Newly listed properties are also down, to the tune of 2.2 per from the previous month.
And although the national MLS Home Price Index dropped when looking at month-to-month statistics, it is still up significantly when compared to last year.
With the drop in listings and the even larger drop in sales, the Canadian Real Estate Association has pegged the sales-to-new-listings ratio at 66.5 per cent, which it describes as being “right on the border between what would constitute a seller’s and a balanced market.”
“After 12 years of ‘higher interest rates are just around the corner’ here they are,” said Shaun Cathcart, CREA’s senior economist. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year because that is already being factored into fixed mortgage rates.”