JAMES MABEY
OTTAWA – Following the Bank of Canada’s third interest rate cut of the year, national home sales increased slightly in September compared to August. This follows a similar pattern of gains recorded in the months following the first two rate cuts.
Home sales recorded over Canadian MLS® Systems climbed 1.9% on a month-over-month basis in September 2024, reaching their highest level since July 2023. The national increase was led by the Greater Toronto Area and Hamilton-Burlington, Montreal and Quebec City, as well as Greater Vancouver and Victoria. (Chart A)
“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.”
Chart A
New listings posted a 4.9% month-over-month rise in September, as sellers listed properties in larger than normal numbers for the first weeks of the month. Gains were broad-based, with most of the country’s biggest markets topping the list.
There were 185,427 properties listed for sale on all Canadian MLS® Systems at the end of September 2024, up 16.8% from a year earlier but still below historical averages of around 200,000 listings for that time of the year.
With sales rising by less than new listings in September, the national sales-to-new listings ratio eased to 51.3%, down from 52.8% in August. This measure could be reversed if all those listings result in higher sales in October. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to-new listings ratio between 45% and 65% generally consistent with balanced housing market conditions.
“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.”
There were 4.1 months of inventory on a national basis at the end of September 2024, down from 4.2 months at the end of August. The long-term average is 5.1 months of inventory, with a seller’s market being below 3.6 months and a buyer’s market being above 6.5 months.
The National Composite MLS® Home Price Index (HPI) inched up 0.1% from August to September; however, small ups and downs aside, the bigger picture is that prices at the national level have remained mostly flat since the beginning of the year. (Chart B)
Chart B
The non-seasonally adjusted National Composite MLS® HPI stood 3.3% below September 2023, a smaller decline compared to the 3.9% declines recorded in July and August. It’s likely negative year-over-year comparisons will continue to shrink given the weakness in prices seen towards the end of 2023.
The actual (not seasonally adjusted) national average home price was $669,630 in September 2024, up 2.1% from September 2023.
Source: crea.ca
