The total home sales for 2023, amounting to 443,511 units, marked a decline of more than 11 per cent compared to the previous year. This represents the lowest annual level for national sales activity since 2008, according to CREA.
Although there was a slight uptick in sales in December 2023 compared to November, experts are cautious about interpreting it as the beginning of a trend. CREA’s senior economist, Shaun Cathcart, emphasized that the December bounce in home sales may not indicate the start of the expected recovery in Canadian housing markets.
Pricing-wise, the national average sale price saw a 5.1 per cent increase in December 2023 compared to the same month in 2022. However, some calculations by the real estate board suggest that prices dropped at the end of 2023 compared to November.
Despite the overall decline in annual sales, December witnessed an 8.7 per cent increase` in national home sales compared to the preceding month. This increase, while notable, does not necessarily signal a sustained upward trend. Experts attribute the December surge to various factors, including potentially warmer-than-usual weather at the end of 2023.
Looking ahead to 2024, the Canadian housing market is expected to remain relatively soft, particularly in the initial months, as interest rates remain high. However, forecasters anticipate certain regions experiencing increased activity as investors seek more affordable options outside of major cities like Toronto and Vancouver.
While some areas of the country may see busy markets, CREA and other experts caution against prematurely interpreting the recent uptick in December as a definitive turnaround. Analysts, including TD Bank economist Rishi Sondhi, advise Canadians to be cautious in drawing conclusions from December data, emphasizing that it is typically a month with lower sales that could be influenced by unique factors, such as weather conditions.
Real estate professionals also note that the winter months often witness a slowdown in real estate activity, as potential buyers and sellers tend to scale back their engagement. Robert Marsiglio, a real estate agent in Whitby, Ont., highlights that the conversation with buyers has shifted, with today’s buyers asking, “How little can I get this house for?” This shift in buyer sentiment underscores the challenges in bridging the gap between buyer offers and seller expectations.
As the Canadian housing market navigates uncertainties in 2024, the delicate balance between affordability, interest rates, and economic conditions will play a crucial role in determining the trajectory of the real estate landscape. Buyers, sellers, and industry experts will closely monitor developments in the coming months to gauge the market’s resilience and potential for recovery.
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