Home sales in Canada hit highest level in October since April 2022
Canada’s real estate market zoomed back to life in October with sales reaching the highest level in more than two years, as buyers finally started to take advantage of lower borrowing costs and an abundance of properties up for sale.
There were 43,294 transactions across the country last month after removing seasonal influences, according to the Canadian Real Estate Association (CREA). That was 7.7 per cent more than in September and the largest volume since April, 2022, when the pandemic’s real estate frenzy was beginning to ease owing to the Bank of Canada’s interest-rate-raising campaign.
CREA called last month’s spike in sales a surprise and the association attributed it to the slew of properties on the market.
Sales have been mostly slow for more than two years. And even after the central bank cut its benchmark interest rate in June, July and September, prospective buyers did not make a purchase. Mortgages were still relatively expensive and would-be buyers could not qualify for a large enough loan. As well, more homeowners were putting their homes up for sale, leaving buyers with more choice and time to make a decision.
But with another interest-rate cut in late October and easier mortgage policies soon coming into effect, buyers have started to transact.
In Toronto, the country’s largest real estate market, home sales rose by 14 per cent from September to October. In the Vancouver region and Fraser Valley in B.C., transactions rose nearly 20 per cent. Other areas from Newfoundland and Labrador to Ottawa, Montreal and Edmonton also recorded an increase in sales.
“October’s strong sales numbers across Canada suggest buyers have been in the market since rates began to fall in early summer, but they were waiting for the right property to come up for sale, which didn’t happen in a big way until September,” James Mabey, CREA’s chair, said in a news release.
But fewer homeowners decided to put their home up for sale last month. The number of new listings fell 3.5 per cent last month after rising 4.8 per cent in September. CREA’s senior economist Shaun Cathcart predicted in the news release that there likely would not be a flurry of new listings until the spring, which historically has been the busiest buying season in the year.
The recent slowdown in sales and lack of competition has given buyers more negotiating power, which has been reflected in real estate values. The home price index, which removes the priciest properties, was $716,800 across the country last month. That was 0.1 per cent lower than September and 2.9 per cent below October, 2023.
Provinces with relatively cheaper properties such as Newfoundland and Labrador, New Brunswick, Quebec, Saskatchewan and Alberta have seen home prices increase year over year. In Ontario and B.C., many of the cities have lower prices today compared with a year ago.
This article was first reported by The Globe and Mail
