JILL OUDIL
OTTAWA – Home sales recorded over Canadian MLS Systems edged back down 3 per cent between December 2022 and January 2023, giving back all of December’s small gains and rejoining the mild downward trend observed since last summer.
Gains in Hamilton-Burlington and Quebec City were more than offset by declines in Greater Vancouver, Victoria and elsewhere on Vancouver Island, Calgary, Edmonton, and Montreal.
The actual (not seasonally adjusted) number of transactions in January 2023 came in 37.1 per cent below the second-best January ever in 2022. The January 2023 sales figure was the lowest for that month since 2009.
“The big question on everyone’s minds after last year was what will housing markets do in 2023?” said Jill Oudil, Chair of Canadian Real Estate Association. “We may have to wait another month or two to see what buyers are planning this year since new listings are currently trickling out at near-record low levels, but that should change as the weather warms,” continued Oudil.
“Early 2023 feels a lot like 2019, where after a year in which it became much harder to qualify for a mortgage, everyone was wondering if the market would pick up in the spring,” said Shaun Cathcart, CREA’s Senior Economist. “In 2019 the market started off slow, as there wasn’t much to buy. It took off once spring listings started to come out. With the Bank of Canada increasingly signaling that rates are now at the top, it’s possible the spring market this year could also surprise, particularly in areas where prices have been stable or are now stabilizing. Buyers are likely feeling increasingly confident in taking on variable rate mortgages, and 2023 will probably be a good window of opportunity to be able to engage in a calmer home search and buying experience following the intense market conditions of the last few years.”
The number of newly listed homes picked up by 3.3 per cent on a month-over-month basis in January, led by increases across British Columbia. That said, despite the small increase, nationally, new listings remain historically low. New supply in January 2023 hit the lowest level for that month since 2000.
With new listings up and sales down in January, sales-to-new listings eased back to 50.7 per cent. This is roughly where it had been over the entire second half of 2022. The long-term average for this measure is 55.1 per cennt.
There were 4.3 months of inventory on a national basis at the end of January 2023. This is close to where this measure was in the months leading up to the initial COVID-19 pandemic lockdowns, and still close to a month below its long-term average of about five months.
The Aggregate Composite MLS Home Price Index (HPI) was down 1.9 per cent on a month-over-month basis in January 2023, continuing the trend that began last spring.
The Aggregate Composite MLS HPI now sits 15 per cent below its peak level, reached in February 2022. Looking across the country, prices are down from peak levels by more than they are nationally in many parts of Ontario and some parts of BC, and down by less elsewhere. While prices have softened to some degree almost everywhere, Calgary, Regina, Saskatoon, and St. John’s stand out as markets where home prices are barely off their peaks at all.
An interesting development in recent months has been an increasing number of East Coast markets where prices appear to have bottomed out on a month-to-month basis and are now trending back up.
The non-seasonally adjusted Aggregate Composite MLS HPI came in 12.6 per cent below its January 2022 reading. Year-over-year declines will likely hit their highest levels over the next two months as we move past the highest price levels on record in February and March of last year.
The actual (not seasonally adjusted) national average home price was $612,204 in January 2023, down 18.3 per cent from the same month last year. The national average price is heavily influenced by sales in Greater Vancouver and the Greater Toronto Area, two of Canada’s most active and expensive housing markets.
Excluding these two markets from the calculation cuts almost $113,000 from the national average price.
