Is the market roaring back to life?
National home sales have increased in Canada for the second consecutive month as buyers continued to snatch up properties amid speculation of impending central bank rate cuts.
New data released on Wednesday by the Canadian Real Estate Association (CREA) showed home sales were up 3.7% last month over December, although prices ticked downward with the seasonally adjusted benchmark slipping by 1.2% to $717,800.
Sales are still mired about 9% below the 10-year average, but the flurry of activity at the beginning of the year seems to suggest growing buyer optimism that the Bank of Canada is on a path to lower rates.
January marked the fifth month in a row that prices fell – but inventory shortages are once again becoming clear, with available supply dropping to 3.7 months compared to 4.1 in November.
“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,” says Larry Cerqua, CREA Chair 👉 https://t.co/ABP2i2Kfbk #CREAstats pic.twitter.com/AsjHBEz44t
— CREA | ACI (@CREA_ACI) February 14, 2024
New listings inched upwards by 1.5% month over month, although they remain rooted around their lowest level since the middle of last year, according to CREA.
The association’s senior economist Shaun Cathcart said the market was still shaking off some sluggishness, but appeared to be well on the road to recovery after a prolonged downturn.
“Sales are up, market conditions have tightened quite a bit, and there has been anecdotal evidence of renewed competition among buyers,” he said. “Taken together, these trends suggest a market that is starting to turn a corner but is still working through the weakness of the last two years.”
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