The number of homes sold nationally climbed 1.3% from September to October 2022. This is the first month we’ve seen gains on a national level since February 2022. The number of new listings also increased in October, indicating more inventory for buyers, especially in the Greater Toronto Area (GTA) and the B.C. Lower Mainland. Could this be a sign that buyers and sellers are now adjusting to the higher cost of borrowing and that the Canadian real estate market is on the upswing?
Sales in More than Half of Local Markets Were Up in October
Sellers that have been sitting on a listing should be happy to hear that approximately 60% of local markets saw an increase in sales in October. With the largest gain of 6% in Greater Vancouver, this may indicate that buyers are sick of sitting on the sidelines and are feeling more motivated to make their move. “In October, sales across the country increased for the first time since before interest rates started to rise last winter,” said Jill Oudil, Chair of CREA. “Of course, we’ve known the demand was there, so it’s just been a matter of some playing the waiting game as borrowing costs and prices have adjusted,” continued Oudil.
The actual number of transactions last month was 36% less than in October 2021 and is still 15% below the pre-pandemic 10-year average for the month, however, this is a great signal that things are improving.
Inventory is Trending Upwards and Prices Have Declined
Inventory in October was up to 3.8 months, a slight increase from 3.7 months at the end of September, but still a great signal for frustrated buyers that are motivated but lack options. The long-term average of this figure is about five months, but this is an improvement from the recording-breaking low of 1.7 months we experienced at the beginning of 2022. Newfoundland & Labrador and Saskatchewan currently have the highest months of inventory, with 8.2 and 6.3 months respectively. Ontario is up by 0.8 months of inventory on a year-over-year (y-o-y) basis to 1.0 months, and British Columbia is up by 1.1 months of inventory y-o-y to 3.7 months. Alberta is down slightly by 0.8 months of inventory y-o-y, currently sitting at 3.5 months, but Calgary is on track to hit a new record for sales numbers. Read more about that here.
Prices are down 9.9% year-over-year in October. The national average home price was $644,643, up 0.7% from $640,479 in September, another signal that we may have hit the bottom and are on our way up to a strong spring market. “October provided another month’s worth of data suggesting the slow down in Canadian housing markets is winding up,” said Shaun Cathcart, CREA’s Senior Economist. “Sales actually popped up from September to October, and the decline in prices on a month-to-month basis got smaller for the fourth month in a row.” Quebec City was the only major market that experienced price growth month-over-month (m-o-m), up 1.1% from September. However, prices declined by less than 2% m-o-m in most cities including Greater Vancouver, Calgary, and the GTA, down by 0.6%, 0.7%, and 1.1% respectively. The largest price declines were in comparatively smaller markets including Saint John, Edmonton, and London St Thomas, dipping by 2.9%, 2.6%, and 2.1% respectively.
With 2023 just around the corner, now is the time to prepare for next year’s market if you’re planning to buy, sell, or both. Keep an eye on our Market Insights blog for our predictions about what’s to come in 2023 and sign up for our newsletter to receive all the information in your inbox. Ready to begin planning? Give us a call today to speak to a real estate agent in your city.