The Canadian housing market is experiencing one of the lowest annual sales volumes in over a decade, despite a slight increase in December sales compared to the previous month. According to the Canadian Real Estate Association (CREA), 2023 saw a decline of more than 11 percent in home sales compared to 2022, marking the lowest annual sales activity since 2008.
A Decline in Sales, Yet a Rise in Prices
The year 2023 witnessed a decline in home sales, with a total of 443,511 units sold, down by more than 11 percent from the previous year. However, despite this decrease, the national average sale price in December 2023 was 5.1 percent higher compared to December 2022. It's important to note that although prices were higher in December, some calculations by the real estate board indicated a drop in prices towards the end of 2023 compared to November.
December Bounce: A Temporary Trend?
December showed a promising increase of 8.7 percent in national home sales compared to November 2023. However, industry experts and economists caution against viewing this as the start of a significant recovery in the Canadian housing markets. Shaun Cathcart, senior economist for CREA, stated, "Was the December bounce in home sales the start of the expected recovery in Canadian housing markets? Probably not just yet." Similarly, TD Bank economist Rishi Sondhi advised Canadians to be cautious in drawing conclusions from December data due to lower sales typically experienced during the month, which may have been influenced by warmer-than-usual weather.
Winter Lull: Changing Conversations
Real estate agent Robert Marsiglio from Whitby, Ont., acknowledges that the winter months often bring slower real estate markets as buyers and sellers tend to "pack it in." However, Marsiglio has noted a change in buyer behavior. In previous years, buyers would often say, "Let's go to the top of our budget." But today's buyers are more inclined to ask, "How little can I get this house for?" This shift in mindset highlights a disconnect between what buyers are willing to offer and what sellers are expecting. Marsiglio suggests that bridging this gap may require buyers earning more money, lower interest rates, or a correction in home prices to make properties more affordable again.
Disparities Among Markets: Calgary's Hot Real Estate Scene
While the Greater Toronto Area experiences a slowdown in pricing, certain real estate markets in Alberta, particularly Calgary, tell a different story. Mortgage broker Max Singh, based in Calgary, highlights the high demand in his city compared to the rest of the country. However, similar to other regions, Calgary faces limited supply as sellers are not listing their homes as frequently. This scarcity of listings, combined with rising values, has led to multiple bidding situations. Singh also notes that many of the buyers driving the hot market in Alberta are out-of-province investors who can make strong offers, potentially overshadowing local buyers.
The contrasting dynamics among different regions emphasize the complexity of the Canadian housing market. As prices fluctuate and sales volumes decline, it's essential for buyers, sellers, and industry professionals to monitor trends closely and adapt to the changing landscape.
Source: CBC News
