With spring buyers eager to come off the sidelines, national home sales experienced a modest increase from February to March, recording 1.4% growth and marking the first back-to-back monthly gains in more than a year. This could indicate that conditions are recovering after a volatile 2022, however, lack of supply is pushing market conditions into tighter territory.
Enjoying our content? Subscribe to our free weekly newsletter to get Canadian real estate market insights, news, and reports straight to your inbox.
Market Conditions Extremely Tight as Supply Dwindles
The Canadian Real Estate Association (CREA) recorded new listings dropping 5.8% month-over-month in March, reaching a 20-year low. Metropolitan areas suffered the most, with Calgary, Edmonton, Hamilton-Burlington, and Halifax-Dartmouth all experiencing supply drops of more than 10%. The Greater Toronto Area (GTA) experienced a 7.3% decrease in supply month-over-month and Greater Vancouver followed suit with a month-over-month decrease of 6.9%.
This puts inventory at just 3.9 months, down nearly 5% from last month’s 4.1 months and a full month below its long-term average. Inventory is even lower in Ontario, where there’s only 2.6 months of supply. The lack of supply is advantageous to sellers as this means prices will likely continue to grow along with competition. “With buyers re-entering a market with historically low supply, homes are not only selling but selling faster,” said Jill Oudil, Chair of CREA.
Inventory Moving Quickly, Keeping Prices Up
The actual (not seasonally adjusted) national average home price in March was $686,371, up 3.6% from February and 12.1% from January. Among the major markets, Quebec City experienced the most growth with the average home price increasing by 4.3% from $315,300 to $329,000 month-over-month. Greater Toronto experienced steady growth as well, with the average price increasing by 2.5% from $1,091,300 to $1,118,500 month-over-month. With buyers gaining confidence in the market, sales activity will likely grow and continue to push prices upwards.
“The 2023 spring housing market is getting going after a tough 2022, and the green shoots continued to pile up in March. Sales are trending up, markets have tightened considerably, the Bank of Canada is on hold, and the MLS® Home Price Index is stabilizing across the country,” said Shaun Cathcart, CREA’s Senior Economist.
Sales increases were most noticeable in Fraser Valley, where activity jumped up by an impressive 39.9% month-over-month (seasonally adjusted). Other markets experiencing significant sales growth include Saint John, up month-over-month by 10.5%, Quebec CMA, up by 7.4%, and London and St. Thomas, up by 4.5%.
If you’re preparing to enter the spring market, whether that’s through buying, selling, or both, it’s important to speak with a local realtor to learn about market conditions in your specific area. If you’re ready, give us a call today to speak with a qualified agent!
