The housing market continues to exhibit stability despite supply issues
National home sales remained historically high in January 2022 despite record-low levels of both new and end-of-month inventories, according to the latest data from the Canadian Real Estate Association.
On a monthly basis, Canadian home sales ticked up by 1%, marking the latest in a four-month streak of stable market activity. This is despite a 10.7% annual decline from the outlier sales performance seen in January 2021, CREA said.
“There was an even split between the number of local markets where sales were up and those where sales were down in January, with gains in Calgary, Greater Vancouver, and Ottawa offsetting declines in Winnipeg, Montreal, the Fraser Valley, and Hamilton-Burlington,” CREA said.
The number of new listings nationwide fell by 11% month-over-month in January, with the Greater Toronto Area accounting for more than half of the national decline, CREA said. On average, the national housing market only had 1.6 months of inventory as of the end of January 2022, accompanying December 2021 as the months with the lowest supply levels ever recorded.
“As expected, January was pretty quiet on the new listings side of things, with this year’s first big new supply numbers unlikely to emerge until the weather starts to warm up a bit,” said Cliff Stevenson, chair of CREA. “The question is, will that supply be overwhelmed by demand as it was last spring, or will we start to see the re-emergence of some of the many would-be sellers who have been hunkered down for the last two years?”
The national average home price grew by 21% to reach a new high of $748,450 in January, with the growth largely influenced by activity in Greater Vancouver and the GTA. Removing these two markets from the January price equation makes the national average price nearly $160,000 lower, CREA said.
“The ideal situation between now and the summer would be that a huge surge of sellers come forward looking to sell in the spring 2022 market,” said Shaun Cathcart, senior economist at CREA. “If that were to occur, similar to 2021, we’d likely see a massive number of sales take place which would get a lot of frustrated buyers into homeownership, and we’d likely see some cooling off on the price growth side if those offers are spread across more listings.”
