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Home sales have turned on its downward trend and increased by 1.3% in October versus September on a national basis, according to a report from the Canadian Real Estate Association.
“While not a large increase, it was significant in that it was the first monthly gain since February,” states the association report released today, Nov. 15. The next month, interest rates started to rise putting the brakes on the real estate market across the country.
While prices dropped 1.2% from September to October nationwide, it was the smallest decline since June.
“October provided another month’s worth of data suggesting the slow-down in Canadian housing markets is winding up,” Shaun Cathcart, the association’s senior economist, said in the release. “Sales actually popped up from September to October, and the decline in prices on a month-to-month basis got smaller for the fourth month in a row.”
For the Interior of B.C., the price drop was lower than the national average, only 0.7% from September. Prices in the Interior have dropped 7.2% over the past six months but they are still 46.9% higher than they were three years ago. The benchmark (typical) home price in the Interior in October was $676,300, above the national average of $644,643.
“Tumbleweeds continued to blow across the Canadian housing market in October,” said Robert Kavcic, a senior economist with BMO Capital Markets, in a note to investors.
Even though sales were up on a month-over-month basis in 60% of all local markets with Greater Vancouver up 6% alone, he pointed out last month’s activity remained below the low end of pre-COVID norms. It was even the quietest October for unit volumes since the economy was climbing out of a recession in 2010, Kavcic said.
Rishi Sondhi of TD Economics had a similar view.
“Sales have already cratered by over 40% since February, are trending at levels last consistently seen in 2012, and appear to have undershot levels in line with fundamentals like income and housing supply,” Sondhi wrote, in a note to investors.
He and Kavcic attributed much of the slowness to interest and mortgage rates, which have been hiked in recent months to combat an inflation level not seen in decades.
That’s weighed on consumer purchasing power and when combined with low levels of new listings, kept many buyers on the sidelines awaiting even further price drops.
While the typical price in Greater Vancouver was $1,169,800, it was not the highest in the country. That distinction went to Oakville-Milton at $1,273,300.
The lowest priced homes of the 53 real estate boards listed were in Saint John, NB, at $268,500.
— With files from The Canadian Press
