Edmonton and Ottawa both saw greater increases in the number of home sales compared to other markets across the country, a new real estate report suggests.
Canadian home sales rose 1.3 per cent month-over-month in December according to Canadian Multiple Listing Service (MLS) systems, with both Alberta and Canada’s capitals leading gains, the Canadian Real Estate Association (CREA) said Monday. MLS is a co-operative marketing system that Canada’s real estate boards use to enhance exposure for listed properties, CREA said.
Alberta’s capital is settling in above average following a dramatic shift that unfolded over the past year, CREA senior economist Shaun Cathcart told Postmedia. Nationally, the number of transactions in December (not seasonally adjusted) fell just over 39 per cent year-over-year, CREA said.
“The Prairie markets are doing relatively better compared to B.C. and Ontario, similar to what’s going on in the East Coast,” he said. “More reasonably priced markets are doing better at a time when it’s really hard to borrow money.”
Inflation and rising interest rates that shaped the 2022 market will also play a role in determining the year ahead, Cathcart said.
By the end of 2022, the Bank of Canada raised the borrowing rate to 4.25 per cent from 0.25 per cent in March to drive down inflation, and economists have forecasted another rate hike in 2023.
Canadian employers added more than 100,000 jobs in December, suggesting an interest rate increase of 0.25 per cent toward the end of January, but forthcoming inflation data from last month to be released Tuesday could also play a role in the central bank’s decision.
“I think that’s going to be an important psychological milestone for a lot of people,” Cathcart said of the central bank’s upcoming Jan. 25 decision. “Because you don’t want to take a fixed-rate mortgage at the top — you want to take a variable-rate mortgage if you think the interest rate is going down.”
The number of seasonally adjusted listings in Edmonton also fell 1.2 per cent in December month-over-month to 3,671 from 3,716, while the year-over-year figure (not seasonally adjusted) fell 16.3 per cent to 1,389 from 1,659, CREA said.
— With files from Postmedia
