At first glance, January seems to be a pretty frigid month Canadian real estate, as month-over-month sales dropped 14.5 per cent. But according to one economist, things aren’t quite as they appear.

“A significant decline in January was always in the cards,” writes National Bank senior economist Marc Pinsonneault, in a recent note. “The [fourth quarter] sales rush took place mostly in Ontario and Alberta and hence nobody should be surprised that these two provinces were those with the largest sales declines.”

Pinsonneault is referring to a pull-forward of sales in December, as buyers rushed to get into the market before new mortgage rules took effect on January 1. The result was higher than average sales in December, and a significant dip in sales in January.

But, according to Pinsonneault, while January’s sales were down a significant amount month-over-month, they were in line with the national 10-year moving average, as seen in the chart above.

“Despite January’s fall, there were still about 40,000 units sold in that month overall in Canada, a decent level by historical standards,” he writes.

The above chart shows that the largest declines came in provinces that had seen a jump in sales in December — mainly Ontario, which experienced a 23.3 per cent drop.

So what do these numbers mean for the rest of 2018? According to Pinsonneault, it’s too soon to say — but he’s not too worried about where things are headed.

“We have to wait in order to gauge the extent to which the new regulations may impact the market,” he writes.

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