HOUSING SUPPLY – February 2023

After a slight increase last period, national home sales declined again, falling 3% month-over-month as of last measure, according to the Canada Real Estate Association (CREA). Affordability challenges continue to constrain market activity, as elevated home prices and rising interest rates limit the number of eligible buyers and cut into purchasing power. As a result, many would-be buyers have turned to the rental market, where monthly rents continue to hit record highs across the country due to limited supply and a surging demand.

New Listings increased 29.5 percent for Waterfront homes and 2.1 percent for Non-Waterfront homes. Sales decreased 59.8 percent for Waterfront homes and 40.4 percent for Non-Waterfront homes. Inventory increased 127.4 percent for Waterfront homes and 211.9 percent for Non-Waterfront homes.

Median Sales Price decreased 30.4 percent to $800,000 for Waterfront homes and 17.1 percent to $697,450 for Non-Waterfront homes. Days on Market increased 67.7 percent for Waterfront homes and 193.3 percent for Non-Waterfront homes. Months Supply of Inventory increased 342.9 percent for Waterfront homes and 433.3 percent for Non-Waterfront homes.

The slowdown in home sales has helped housing supply increase, with 4.3 months’ supply of inventory nationally heading into February. Although still below the long-term average of 5 months, the current supply of homes is close to where it measured in the months prior to the COVID-19 pandemic lockdown. The decline in sales is also reflected in softening home prices, which have fallen for 11 consecutive months, with the Aggregate Composite MLS Home Price Index (HPI) now 15% below its peak level in February 2022, according to CREA.

HOUSING SUPPLY – Canadian Real Estate Association (CREA)

January 2023

The Canada housing market began the year in a state of rebalance, with many buyers and sellers remaining cautious while they wait to see where the market is headed. National home sales edged up 1.3% month-over month

as of last measure, while new listings fell 6.4%, equaling 4.2 months of inventory heading into January, according to the Canada Real Estate Association (CREA). Demand for housing persists, but inflation, higher borrowing costs, and elevated sales prices have cut into affordability, causing market activity to decline compared to this time last year.

New Listings decreased 8.4 percent for Waterfront homes but increased 53.9 percent for Non-Waterfront homes. Sales decreased 34.6 percent for Waterfront homes and 33.7 percent for Non-Waterfront homes. Inventory

increased 86.2 percent for Waterfront homes and 275.6 percent for Non-Waterfront homes.

Median Sales Price decreased 21.7 percent to $899,950 for Waterfront homes and 17.2 percent to $650,000 for Non-Waterfront homes. Days on Market increased 78.0 percent for Waterfront homes and 92.0 percent for Non-Waterfront homes. Months Supply of Inventory increased 228.6 percent for Waterfront homes and 460.0 percent for Non-Waterfront homes.

The decline in home sales continues to put downward pressure on sales prices, with the Aggregate Composite MLS Home Price Index (HPI) falling 1.6% month-over-month nationwide, marking the 9th consecutive monthly price drop, according to CREA. Although prices have fallen more than 13% from their peak in February 2022, the cost of housing remains significantly higher than it was in 2019, prior to the start of the pandemic. Borrowing costs continue to rise as the Bank of Canada attempts to tame inflation, with the key interest rate now 4.50% following the Bank’s latest quarter point.