Unexpected Surge in Canadian Home Sales Wraps Up 2023: CREA

Statistics released by the Canadian Real Estate Association (CREA), revealed that there was an unexpected surge in national home sales in December 2023.

Statistics released on January 15, 2024, by the Canadian Real Estate Association (CREA), have revealed that national home sales were up on a month-over-month basis in December 2023.

Image source: CREA

According to CREA, home sales activity recorded over Canadian MLS Systems rose 8.7 per cent between November and December 2023. The actual number of transactions came in 3.7 per cent above December 2022, which is the largest year-over-year gain since August.

On an annual basis, home sales totalled 443,511 units in 2023, indicating a decline of 11.1 per cent from 2022. According to CREA, this was technically the lowest annual level for national sales activity since 2008. However, CREA noted that it was very close to levels recorded in each of the five years after the 2008 financial crisis and the first year the uninsured stress test was implemented in 2018.

“While December did offer up a bit of a surprise in sales numbers to cap the year, the real test of the markets’ resilience will be in the spring,” said Larry Cerqua, chair of CREA. “There are only a couple of months left until that gets underway.”

“Was the December bounce in home sales the start of the expected recovery in Canadian housing markets? Probably not just yet,” said Shaun Cathcart, CREA’s senior economist. “It was more likely just some of the sellers and buyers that were holding onto unrealistic pricing expectations last fall finally coming together to get deals done before the end of the year. We’re still forecasting a recovery in housing demand in 2024, but we’ll have to wait a few more months to get a sense of what that ultimately looks like.”

The number of newly listed homes dropped by 5.1 per cent on a month-over-month basis in December, bringing them to the lowest level since June, according to CREA.

The national sales-to-new listings ratio tightened to 57.8 per cent in comparison to 50.5 per cent in November. The long-term average for the national sales-to-new listings ratio is 55 per cent.

CREA also noted that there were 3.8 months of inventory on a national basis at the end of December 2023, down from 4.2 months at the end of November.

The Aggregate Composite MLS Home Price Index (HPI) declined by 0.8 per cent on a month-over-month basis in December 2023. In line with firming market conditions, this measure was smaller than the 1 per cent decrease recorded in November and the 0.9 per cent decline logged in October.

Price declines of late have been located in Ontario markets, particularly the Greater Golden Horseshoe, and British Columbia, to lesser extent.

Prices are mostly holding firm or in some cases continuing to climb in places like Alberta, New Brunswick, and Newfoundland and Labrador.

The Aggregate Composite MLS HPI was up 0.7 per cent on a year-over-year basis in December 2023, up slightly from the 0.6 per cent year-over-year gain in November.

The actual national average home price was $657,145 in December 2023, up 5.1 per cent from December 2022, according to CREA.

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