Despite affordability challenges, rising housing demand has pushed Canada’s national average home price up to $716,000, in April.
That’s a 6% month-over-month rise, which was driven by increases in Nova Scotia (+7%), Ontario (+6%) and B.C. and Alberta (+4%), according to monthly resale data from the Canadian Real Estate Association
In seasonally adjusted terms, the MLS home price index was up 1.6% month-over-month. While the average sale price remains down 3.9% from April 2022, it has now surged by $103,500 since January 2023.
“With interest rates at a top, and home prices at a bottom, it wasn’t all that surprising to see buyers jumping off the sidelines and back into the market in April,” said Shaun Cathcart, CREA’s Senior Economist. “Supply, on the other hand, has been sluggish, hence the price gains from March to April seen all over the country.”
CREA reported that months of inventory continued to slide to 3.3 months, down from 3.9 in March and the measure’s long-term average of five months.
“The issue going forward is not new: demand is once again returning at a scale that is outpacing supply,” said Larry Cerqua, CREA’s new chair.
National home sales were up 11.3% month-over-month in April. The number of newly listed homes was up 1.6% on the month, but remains near a 20-year low and 26% below year-ago levels.
CREA added that with sales gains “vastly” outpacing new listings, the sales-to-new listings ratio jumped to 70.2%, up from 64.1% in March and well above its long-term average of 55.1%.
Compared to a year ago, sales are still down by 19.5%.
Cross-country roundup of home prices
Here’s a look at select provincial and municipal average house prices as of April.
|Location||Average Price||Annual price change|
|Barrie & District||$809,000||-18.4%|
*Some of the movements in the table above may be somewhat misleading since average prices simply take the total dollar value of sales in a month and divide it by the total number of units sold. The MLS Home Price Index, on the other hand, accounts for differences in house type and size.
Markets have moved back into seller’s territory
With support from slightly lower mortgage rates, a strong job market and “improving buyer psychology from a central bank that’s on pause,” Rishi Sondhi of TD Economics noted that Canada’s real estate market has moved back into seller’s territory.
“An improving demand backdrop is helping boost home prices, even as affordability remains significantly strained. However, subdued supply is probably playing an even larger role in pushing prices higher,” he wrote.
“As a result, markets have moved even further into seller’s territory (a considerable tightening from even a few months ago), flagging further price gains in coming months.
BMO’s Douglas Porter remarked that the Canadian housing market seems to have found a floor, which could be concerning to the Bank of Canada.
“Some clarity on the interest rate front has no doubt played a major role, as has the underlying resiliency of the economy itself (highlighted by the persistent strength in jobs),” he wrote.
“As we have often pointed out, if housing—the most interest-sensitive and cyclical sector of the economy—is showing a renewed pulse, it begs the question of whether monetary policy is nearly tight enough,” he added. “While we don’t look for further rate hikes by the Bank of Canada, renewed strength in housing certainly aims the risks squarely in that direction.”