Mar 18, 2024
Canadian Home Sales Decrease for First Time in Three Months
, Bloomberg News
(Bloomberg) -- Canadian home sales declined for the first time in three months as buyers’ urgency to jump into the market cooled off.
The number of transactions nationally fell 3.1% in February from the month before, according to data released Monday by the Canadian Real Estate Association. Benchmark home prices halted a five-month streak of declines, holding at C$719,000 ($531,300).
Canada’s housing market over the past year has fluctuated with the outlook for the central bank’s monetary policy. The Bank of Canada started raising rates in 2022, which forced many potential homebuyers to the sidelines and caused prices to fall.
But recent indications that the central bank is poised to cut rates in the future have spurred more shoppers to get into the market before competition floods in and pushes prices up. It’s also playing out against the backdrop of a more fundamental housing shortage that’s made owning a property in Canada even less affordable in recent years.
“At this point, it’s hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they’re just waiting for the spring listings to hit the market,” Larry Cerqua, chair of the Canadian Real Estate Association, said in a statement. “Either way, neither of those are likely too far off.”
The number of new listings rose in February, helping to balance out the market slightly. The number of months it would take the market to clear all the houses up for sale at the current rate of transactions inched up to 3.8 from 3.7 in January, the real estate board data show. A ratio of sales-to-new listings eased to 55.6%, slightly above its long-term average.
Recent economic data that will guide the Bank of Canada’s next move on interest rates has been mixed, with both gross domestic product and job creation coming in hotter than expected. But wages, consumer spending and inflation continue to slow. Interest rate traders are currently pricing in a rate cut for the central bank’s July meeting, Bloomberg calculations show.
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