After the slowing of real estate sales due to the unprecedented and unexpected rate increases seen last year, the market is starting to adjust and recover. April housing data showed an average price of homes at $716,000 – an increase of over $100,000 from January. For context, this is still 3.9 percent lower than the cost of an average home in April 2022. Vice President of Re/Max Canada, Elton Ash observes that in hindsight, Canada’s housing market may have reached a “price trough” or its low back in early January.
With the softening and stabilizing of prime rates, investors and buyers alike are adjusting to the new cost of homeownership and adapting accordingly.
Ash believes that the market may be going back to its “historical norm” in terms of interest rate levels. “This is sort of what we knew would be occurring as we saw inventory levels dropping through the last year and we knew that buyers would become acclimatized to high interest rates because they weren’t record high.” He remarked, “it’s really just a continuation of Canadian confidence in home ownership and the desire to be in our own home.”
According to the Canadian Real Estate Association (CREA), since January the rebound has been occurring nationwide, however disproportionately in Toronto and Vancouver. Sales outpaced new listings in April 2023 with sales-to-new listings ratio jumping to 70.2 percent up from 64.1 percent in March.
Senior economist Shaun Cathcart believes that the supply problem, compounded by demand being so strong, indicates the country can still be categorized as a seller’s market. With increasing immigration, especially to the major metropolitan areas of Vancouver and Toronto, demand should remain strong for the foreseeable future.
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