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The number of homes bought and sold across Canada dropped between February and March, an early indicator that the market could be showing signs of cooling down.
The latest statistics from the Canadian Real Estate Association (CREA) show that in addition to national home sales, property prices and new listings also eased off last month.
“While the market remains historically very active, March definitely saw a slowdown compared to February in terms of both activity and price growth,” said Jill Oudil, chair of CREA, in the company’s monthly market update. “One month does not make a trend, so we’ll have to wait and see if this is the beginning of the long-awaited cooling off of this market.”
Here’s what we know about March’s housing market based on the latest information from CREA.
National home sales fell 5.4 per cent month-to-month
According to Canada’s MLS systems, home sales fell back 5.4 per cent between February and March, a trend that “puts activity back in line with where it had been since last fall.” The actual — not seasonally adjusted — number of transactions recorded in March were down 16.3 per cent compared to the all-time record set in March 2021, but still marks the second-highest sales level on record for that month.
Sales were noted to be down in half of local markets during March, a trend that was led by the Greater Toronto Area and Calgary.
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“It was good to see a moderation in the housing markets in March, given so many observers were dreading another year of price gains like we saw [in] 2021,” said CREA’s Senior Economist, Shaun Cathcart, in the report.
“There were a number of measures announced in the federal budget to help aspiring home buyers, the biggest being getting more housing built. That is the obvious long-term solution to this issue because we all need to live somewhere. In the near-term, the Bank of Canada will do the heavy lifting in the months ahead to slow things down on the price side,” he added.
New listings and sales dropped at a nearly equal rate
The number of new listings coming online fell by a similar amount to home sales in March.
Following an increase in February, the quantity of newly listed homes dropped 5.5 per cent month-over-month in March, a trend mostly influenced by the Greater Vancouver, Fraser Valley, Calgary and GTA markets. At the end of March, there was 1.8 months of inventory on a national basis, up from a record-low of 1.6 months that was recorded over the past three months.
As sales and new listings fell at a near equal rate last month, the sales-to-new listings ratio stayed at 75.3 per cent compared to 75.2 per cent in February. Two-thirds of local markets were seller’s markets in March, while the other third was in balanced market territory.
Average home prices rose over 11 per cent from March 2021
Last month, the Aggregate Composite MLS HPI was up one per cent monthly, a slowdown from February’s record 3.5 per cent increase. The non-seasonally adjusted Aggregate Composite MLS HPI was up by 27.1 per cent on a yearly basis in March.
The actual — not seasonally adjusted — national average home price was $796,000 in March, an 11.2 per cent increase from March 2021. When removing Greater Vancouver and the GTA from the equation, the national average home price drops $163,000 to $633,000.