February witnessed a significant surge in home sales across Canada, marking a notable increase of 19.7 percent compared to the same period last year, as reported by the Canadian Real Estate Association (CREA). This spike, characterized as potentially the "last relatively uneventful month of the year," reflects a rebound from the subdued activity observed in February 2023, which marked one of the lowest points for the month in the past two decades.
CREA's analysis suggests that the current uptick in sales partly stems from the weakness observed in the housing market during the previous year. Additionally, the present activity levels have climbed back to approximately five percent below the ten-year average. Despite a slight month-over-month dip of 3.1 percent in seasonally adjusted home sales compared to January, CREA notes a general trend of increased activity over the past three months compared to the quieter market experienced in the fall of 2023.
Shaun Cathcart, senior economist at CREA, emphasized the mounting demand on the sidelines, suggesting that the narrative surrounding the housing market will likely focus less on the precise timing of interest rate adjustments and more on the volume of homes entering the market this year.
Newly listed properties saw a modest uptick of 1.6 percent on a month-over-month basis. However, the inventory of available homes remained somewhat constrained, with 3.8 months of inventory at the national level by the end of February 2024, slightly up from 3.7 months in January but falling short of the long-term average of approximately five months.
In terms of pricing, the actual national average home price reached $685,809 last month, reflecting a 3.5 percent increase from February 2023. This upward trajectory in prices aligns with the growing optimism observed among buyers, according to Vy Ngo, a sales representative at Big City Realty Inc. Brokerage.
Ngo noted that her clients are displaying increased confidence, with many obtaining pre-approvals and actively exploring the market. She anticipates a resurgence in market activity once the Bank of Canada implements anticipated rate cuts. Ngo's recent experience in the Toronto area exemplifies this sentiment, as she successfully facilitated the sale of a property within just three days of listing.
Reflecting on this sale, Ngo highlighted the strategic decision to wait until the new year to list the property, a move that ultimately proved fruitful for her client. This anecdote underscores the potential for robust market performance in the coming months, buoyed by both buyer enthusiasm and favorable economic conditions.
