Market News

Canada home prices slide as homebuyers go into 'hibernation' - FINANCIAL POST

NOVEMBER 20, 2023

Homebuyers are in “hibernation” and some would-be sellers are avoiding the market altogether, the head of Canada’s national real estate association said Nov. 15 upon the release of October figures that showed the country’s housing markets are continuing to cool.

The national benchmark home price stood at $745,800 in October, marking a 1.1 per cent increase year-over-year, but a decline of 0.8 per cent from September, data from the Canadian Real Estate Association (CREA) showed.

At the same time, home sales fell 5.6 per cent from September to October, mainly because of declines in Canada’s biggest markets.

CREA chair Larry Cerqua said that potential homebuyers appear to have entered a phase of “hibernation.”

“The October numbers also revealed some sellers may be shelving their plans until next spring,” Cerqua said in the report. “That said, there are still a lot of people active in the market and looking to get deals done this year.”

Despite a recent slump in sales, the total housing transactions in October 2023 slightly surpassed the previous year’s figures, registering a 0.9 per cent increase over October 2022. In an interview, Re/Max president Christopher Alexander said the persistent price growth, despite falling sales, shows the housing market remains resilient.

“There’s still enough demand to support current pricing levels,” Alexander said. “And so while homes are certainly taking longer to sell, we’re seeing signs of more sellers willing to negotiate. Fundamentally speaking, there’s still a lot of strength in the market.”

Regionally, declining home prices were most pronounced in Ontario, with Hamilton-Burlington and Mississauga leading in significant reductions. A similar pattern is now unfolding in British Columbia, where Chilliwack, the Fraser Valley and the Lower Mainland are experiencing decreases of 1.1 per cent, 0.7 per cent, and 0.3 per cent, respectively. These figures suggest a wider regional trend towards a softening of home prices.

New home listings in Canada also decreased by 2.3 per cent in October, the first drop since March. This led to a national sales-to-new listings ratio of 49.5 per cent, a 10-year low, down from April’s recent peak of 67.9 per cent and below the long-term average of 55.1 per cent.

Inventory stood at 4.1 months, an increase from May’s 3.1 months but still below the long-term average of nearly five months.

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