Housing market likely in ‘hibernation’ until next spring, CREA data shows
Canada’s biggest housing markets saw a “sizable decline” in sales last month, according to the national real estate body, as would-be buyers and sellers alike increasingly put their plans on hold.
The Canadian Real Estate Association (CREA) said Wednesday that home sales recorded in October were down 5.6 per cent from the previous month, as activity slowed in “most” of Canada’s largest markets.
On a non-seasonally adjusted basis, the national average sale price for a home in October was $656,625. That’s up 1.8 per cent annually and slightly above figures seen in September.
Another key metric, the sales-to-new listings ratio, showed Canada’s housing market continued to trend in favour of buyers at the negotiation table.
This ratio slowed to 49.5 per cent in October, reaching a 10-year low, CREA said. That compares to an all-time high of 67.9 per cent recorded in April and the long-term average of 55.1 per cent.
A higher sales-to-new-listings ratio implies a tighter housing market in favour of sellers; the lower the figure goes, the more choice and power buyers tend to have in negotiating transactions.
Rishi Sondhi, senior economist at TD Bank, said in a note to clients Wednesday morning that the sales-to-new-listings ratio in Ontario is the lowest its been since the 2008-09 financial crisis.
Alongside similar easing in British Columbia, Sondhi forecast that “prices will head lower in these two markets over the next several months, dragging down the nation-wide average price.”
But the trends towards a buyers’ market come as higher interest rates from the Bank of Canada limit buying power for many Canadians.
Darren King, economist with National Bank of Canada, noted that housing affordability is on the decline thanks to
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