Canadian real estate finally saw some positive news—sort of. Data from the Canadian Real Estate Association (CREA) shows home prices climbed in February, marking the first positive move in over half a year. The odds of that climb being noise are even higher than usual, as sales continue to fall and the market reported the weakest demand balance in at least 9 years.
Canadian Real Estate Prices See First Increase In 8 Months
Canadian Real Estate Prices: The price of a typical home across Canada.
Source: CREA; Better Dwelling.
Canadian real estate prices made a small but significant increase last month. The price of a typical home climbed 0.5% (+$3.5k) to $661.3k in February, marking the first monthly increase in 8 months. However, prices remain 4.8% (-$33.2k) lower than last year, and 21.4% (-$180.0k) lower than peak. One month isn’t a trend, but every trend starts with one.
Canadian Real Estate Demand Still Weak, Inventory Remains Strong
Sales and new listings: The number of homes sold and listed across Canada.
Source: CREA; Better Dwelling.
Despite the mild price bump, already weak winter demand eroded even further. There were 30,244 homes sold through the MLS in February, 6.1% lower than last year. It was the weakest volume for the month since 2023, but keep in mind February is often one of the weaker months when it comes to sales.
The winter slowdown hasn’t impacted sellers to the same degree in recent years. There were 64,531 new listings in February, only 0.4% lower than last year—roughly the same level the market’s seen for 3 years. February volume hasn’t budged much in the past 3 years, but it’s a lot higher than the lows in 2023 (+25.6%) or 2019 (+12.2%).
Buyers falling faster than sellers helped push the Sales-to-New-Listings Ratio (SNLR) down to 46.9% in February, confirming it as the lowest point in the available decade of data.
Cities like Toronto are also demonstrating that new listings aren’t the only inventory data point that matters. Existing inventory has built up in a few markets, and anecdotal evidence from some brokerages suggests some sellers are waiting for spring, hoping for the market to firm first.
Prices moving higher for the first time in months is encouraging, but market activity isn’t. It’s often said that price growth without volume has no confirmation. Finding a few buyers willing to pay more is easier than the general market. However, the longer sales stagnate, the more pent-up demand builds. While that doesn’t mean more buyers will suddenly be able to buy, it can trigger those sitting on the sidelines and waiting for a bottom to jump into the market.
I hate being skeptical of “official” data, but until Canada has access to public sales records, I assume the board just changes models until it does what they want. Is the CREA update this month or next?
The crea expert says it’s the snow
😒
Expert……..
HAHA. I told you prices can’t keep going down. Everyone wants to live in Canada except a few losers that don’t want to work. Near here, I might jump back in to buy some investment properties.
I think his point about low volume confirmation is one of the bigger takeaways.
Low volume skews composition and intention. Toronto can stall and Halifax can rise, and that would push the floor higher (just an example, no idea if that happened last month). Depending on weight, shifting from condos to detached homes (or entry to luxury) can skew it too.
I know as an investor the point about watching the market at this point is important, it may be exiting the lull. But you want confirmation.
I don’t know what it means for end users, but don’t buy too much house and you’ll never regret that decision.
Rising prices with continued falling sales does not a sound investment make.
Have fun
I think the February price climb indicates that more high end homes were sold this year.
TENS OF MILLIONS OF CANADIANS ARE JUMPING FOR JOY
CANADA’S HOUSING MARKETS ARE CRASHING HARD
I keep tabs on a number of markets and there is no way sale prices have gone up. A few houses have sold at asking, most have sold for $10 -30,000 under asking. I agree with Jason that a number of expensive home sales have skewed the data.
Absolutely right
Hello McFly
Spring market
Feb to March goes up…..
How about Year over Year?
Not relevant or perhaps we should blame it on the snow???
The war will be the next scapegoat; everything and anything but accepting that prices need to correct to salaries in the country.
Are we all such sheep to believe the crazy comments from industry “experts” in the country?
Plenty of supply; demand is weak; prices are climbing. Doesn’t make a lot of sense unless it’s a few high end/expensive homes skewing the data. The people buying the most expensive homes don’t fret about mortgage rates, oil wars, or economic wobbling.