Home sales and prices fell further in November
Home sales resumed their decline in November following a pause in October, while average home prices also continued their downward slide.
Home sales fell another 3.3% in November compared to the month before, and are now down 38.9% year-over-year, according to data released by the Canadian Real Estate Association (CREA).
“November’s housing data from across Canada came in as expected – still pretty quiet – and that is unlikely to improve this winter with the Bank of Canada raising rates again last week,” said Shaun Cathcart, senior economist at CREA.
In seasonally adjusted terms, home prices were down another 1.4% from October, and 4.4% lower compared to a year ago.
The actual (not seasonally adjusted) price stood at $632,802 in November. That’s down 12% from November 2021.
New listings were down 1.3% month-over-month following a 2.2% rise in October, CREA noted.
“In terms of monthly new supply, the bigger picture is listings are not flooding the market,” CREA noted. With the exception of 2019, November 2022 saw the fewest new listings for that month in 17 years.
Months of inventory continued to improve to a near-pre-pandemic level of 4.2 months. That’s up from 3.8 in October and a record low of 1.6 earlier this year but remains nearly a full month below its long-term average, CREA said.
Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price stands at $509,802.
Cross-country roundup of home prices
Here’s a look at select provincial and municipal average house prices as of November, with their annual and monthly changes.
|Location||Average Price||Annual price change||Month-over-month change|
|Barrie & District||$782,500||-9%||-1.5%|
*Some of the movements in the table above may be somewhat misleading since average prices simply take the total dollar value of sales in a month and divide it by the total number of units sold. The MLS Home Price Index, on the other hand, accounts for differences in house type and size.
The Aggregate Composite MLS HPI is now about 11.5% below its peak, according to CREA, with prices in Ontario and British Columbia down more compared to other parts of the country.
Prices to trend lower until spring: RBC
Despite the fall in prices in November, the declines are getting progressively smaller when looking at the year as a whole, noted Scotiabank economist Farah Omran.
She noted that with November’s declines, the MLS Home Price Index is down just 11.5% from February’s peak and remains 35% above pre-pandemic levels, while acknowledging that performance varies “quite significantly” across cities.
RBC’s Zeba Khan also touched on the regional dynamics in a research note, pointing out that conditions in Ontario and B.C. are “more favourable to buyers” where demand-supply conditions are less balanced.
“It’s no surprise then to see some of the larger price declines taking place in these markets,” she wrote.
Since February, the MLS HPI is down notably in places like Cambridge (-21%), London (-19%), Kitchener-Waterloo (-19%), Brantford (-18%), Hamilton-Burlington (-18%), Kawartha Lakes (-17%), Barrie (-17%), Chilliwack (-16%) and the Fraser Valley (-13%).
Looking forward, Khan argues that the slowing pace of declines is a sign that “the bulk of the market downturn has run most of its course.” Though, that doesn’t mean markets are expected to heat up anytime soon.
“Higher interest rates and stretched affordability will continue to challenge buyers for some time,” Khan wrote. “This will keep activity quiet for a while longer even if it stabilizes near current levels. We think benchmark prices will keep trending lower until spring.”