Canadian Home Sales Dip 3.1% in February, Prices Remain Steady

Canadian home sales experienced a slight dip of 3.1% in February, while home prices remained steady compared to the previous month, according to the Canadian Real Estate Association (CREA).

However, there was a notable increase of 19.7% in home sales compared to the same period last year, partially due to weak sales figures in February 2023, which were among the lowest in the past two decades.

The past three months have shown higher levels of activity compared to the same period last year, with January witnessing a significant 22% year-over-year increase in home sales.

BMO chief economist Douglas Porter noted that despite the recent moderate decline in sales, the housing market seems to be stabilizing. He emphasized that the Bank of Canada remains patient and is not rushing to offer rate relief.

Porter highlighted the significant population growth in recent years as a key factor supporting the housing market. He anticipates that once interest rates start to decrease, housing activity will quickly rebound.

In February, the number of newly listed properties rose by 1.6% compared to the previous month, leading to a balanced national sales-to-listings ratio of 55.6%.

The national average home price in February stood at $685,809, marking a 3.5% increase from the same month in 2023.

CREA’s senior economist, Shaun Cathcart, suggested that February might be the calm before the storm in terms of the 2024 housing market. With significant demand waiting on the sidelines, the focus may shift to the number of homes available for sale this year rather than the timing of interest rate cuts.