It offers insights on latest home sales numbers
Home sales activity is now gradually stabilizing in most Canadian markets after substantial decelerations through the spring and summer amid the central bank’s interest rate hikes, according to RBC Economics.
“Nationwide activity even picked up slightly on a month-to-month basis for the second time in three months in December (up 1.3%),” RBC said in its new analysis. “Activity is levelling off in the majority of local markets, including Victoria, Vancouver (and the rest of Lower Mainland BC), Calgary, Edmonton, Toronto (and the rest of southern Ontario) and Atlantic Canada.”
“Only a few pockets in the Prairies and Quebec maintained a lower trajectory in the latter stages of 2022. But for Regina and Saskatoon, home resales remain solid despite the softening, still tracking well above pre-pandemic levels.”
The trends are consistent with RBC’s predictions that “a cyclical bottom” is just beyond the horizon, “likely in early-2023.”
However, home prices – despite declining for the 10th consecutive month with a 1.6% drop in December – will not likely stabilize as quickly.
“We think it will continue to slide until spring at the earliest as poor affordability continues to weigh heavily on buyers,” RBC said. “Another likely rate hike from the Bank of Canada later this month could make things even more challenging for some. Still, we think the pace of price declines will continue to ease gradually thanks to stable demand-supply conditions.”
At the same time, more listings are likely to pop up in the very near future.
“Higher interest rates may also press a number of current owners to sell if mortgage payments become unmanageable,” RBC warned.
