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In February, Canadian home sales experienced a slight dip of 3.1 percent, while home prices remained stable compared to the previous month, as reported by the Canadian Real Estate Association (CREA). However, there was a significant surge of 19.7 percent in home sales compared to the same period last year. This increase is attributed partially to the weakness observed in February 2023, marking one of the lowest points for home sales in the month over the past two decades. Notably, there has been a consistent uptick in housing market activity over the last three months in comparison to the corresponding period the previous year, with January witnessing a notable 22 percent year-over-year increase in home sales.
BMO chief economist Douglas Porter suggests that despite the recent moderate decline in sales, there are signs that the housing market may be stabilizing. However, the Bank of Canada remains cautious and is not rushing to provide rate relief. Porter highlights the significant support for the housing market stemming from robust population growth in recent years. He anticipates that when interest rates eventually decrease, there will likely be a swift uptick in housing activity. Despite this optimism, Shaun Cathcart, senior economist at CREA, emphasizes that the focus of the 2024 housing narrative may shift from the timing of interest rate cuts to the volume of homes entering the market.
In February, the number of newly listed properties increased by 1.6 percent compared to the previous month, contributing to a balanced national sales-to-listings ratio of 55.6 percent. Concurrently, the national average home price saw a rise of 3.5 percent year-over-year, reaching $685,809. Shaun Cathcart anticipates that February may have marked the last relatively calm month in the Canadian housing market for the year, hinting at potential shifts ahead. With pent-up demand evident, the focus is expected to shift towards monitoring the supply of homes entering the market throughout the year, shaping the trajectory of the housing narrative in 2024.
Read the full article on: CBC
