Canadian real estate markets are witnessing a cautious yet optimistic resurgence. In September, the Canadian Real Estate Association (CREA) reported a slight uptick in home sales nationwide following the third consecutive interest rate cut by the Bank of Canada. This development suggests potential relief for buyers and sellers who have been navigating a turbulent market landscape.
“The beginning of September saw a burst of new supply for buyers to choose from before things generally quiet down for the winter,” said James Mabey, CREA Chair. “While some buyers may choose to take advantage, others may be inclined to wait as the bulk of future rate cuts from the Bank of Canada are now expected to show up in a matter of months as opposed to years. Whether you’re looking to buy or sell a property this fall or getting ready for what promises to be a big spring market next year, the first step is always to contact a REALTOR® in your area.”
What the numbers say
According to the report, national home sales rose 0.9% last month, reaching their highest level since July 2023. This slight boost in sales was led by the Greater Toronto Area and Hamilton-Burlington, Montreal and Quebec City, as well as Greater Vancouver and Victoria. The improvement comes after a period of volatility where buyers and sellers alike were cautious, waiting for signs of stability.
“Sales gains are now three for three in the months following interest rate cuts, which is a trend even though the increases weren’t headline-grabbing,” said Shaun Cathcart, CREA’s Senior Economist. “That said, with the pace of rate cuts now expected to be much faster than previously thought, it’s possible some buyers may choose to hold off on a purchase for now. This could further boost the rebound expected in 2025 at the expense of the last few months of this year.”
Inventory and new listings
In September, new property listings saw a 4.9% increase from the previous month, with a notable influx of listings during the initial weeks. This upward trend was widespread, encompassing many of the nation’s largest markets.
By the end of September 2024, there were 185,427 properties listed for sale across all Canadian MLS® Systems, marking a 16.8% increase from the same period last year, although this figure still falls short of the historical September average of approximately 200,000 listings.
Despite new listings outpacing sales in September, the national sales-to-new listings ratio softened to 51.3%, a decrease from 52.8% in August. A reversal of this trend may occur if the increase in listings translates into heightened sales in October. Historically, a national sales-to-new listings ratio of 55%, and one ranging from 45% to 65%, typically indicates a balanced market.
As of September 2024, the national housing inventory stood at 4.1 months, slightly down from 4.2 months in August. The long-term average is around 5.1 months, with periods under 3.6 months indicating a seller’s market and those over 6.5 months denoting a buyer’s market.
Prices remain stable
The National Composite MLS® Home Price Index (HPI) ticked up a marginal 0.1% from August to September. Despite these minor fluctuations, the broader view shows that national home prices have largely remained stable since the start of the year.
