(Toronto) Residential sales increased for the second consecutive month in January in Canada, revealed Wednesday the Canadian Real Estate Association (CREA), which also noted that the drop in prices that began in December continued.
After seasonal adjustments, residential sales increased 3.7% in January compared to December, while they jumped 22% compared to January 2023.
In the second case, however, the marked increase is rather attributable to a particularly weak month of January 2023, which was “the worst start to the year in the last two decades”, recalled the ACI.
The increase observed in January was still added to the 8.7% increase, seasonally adjusted, in real estate activity which was recorded in December compared to the previous month.
Since sales are on the rise, market conditions have tightened considerably, even though prices are trending downward in areas where sales have increased the most over the past two months.
“Overall, the trends suggest a market that is beginning to recover, but still needs to overcome the weaknesses of the past two years,” ACI senior economist Shaun Cathcart said in a statement.
Sales in January still remain approximately 9% below the 10-year average.
Increases were notably recorded in the Greater Toronto Area, as well as Hamilton-Burlington, Montreal, Greater Vancouver and the Fraser Valley, Calgary and most areas of the Greater Golden Horseshoe and regions of Ontario resort.
The overall benchmark price, which aims to represent price changes for a typical home, increased 0.6% from the previous year to $717,800. However, it fell 1.2% month over month.
The increase in activity and the weakness in prices are mainly attributable to market conditions in Ontario and British Columbia, according to what TD Bank economist Rishi Sondhi indicated in an analytical note.
“Our view on this dichotomy is that homeowners gave up on the price they were asking to sell their homes because the conditions in these markets favored buyers,” he explained.
The increase in sales, helped by mild weather conditions and falling bond yields, exceeded TD’s expectations, Mr. Sondhi added.
Although we expected Canadian home sales to increase in the first quarter, they are on track to exceed our forecasts by a considerable margin.
Rishi Sondhi, economist at TD Bank
The increase in sales outpaced the number of newly listed properties, up 1.5% month over month, creating a more balanced market.
Mr. Sondhi said average home price growth is expected to continue in tighter markets, but serious deteriorations in affordability in some markets are expected to limit runaway price growth.
For his part, BMO’s senior economist, Robert Kavcic, recalled in another note that sales are generally weak during the winter months. So only when the spring data starts to be published will we really be able to get a clear idea of the trend.
“We will really have to wait to see the figures for March and the following months,” warned Mr. Kavcic.
reference: www.lapresse.ca