The Canadian housing market is experiencing a subtle yet promising rebound following the Bank of Canada's third interest rate cut of 2024. According to the latest monthly housing market report, home sales across Canada rose by 1.9% in September compared to August, marking the highest sales level since July 2023. This increase continues a trend observed after the previous rate cuts, indicating that lower borrowing costs may be enticing more buyers into the market.
Key Highlights from September 2024
Sales Activity: National home sales climbed 1.9% month-over-month, reflecting a 6.9% increase compared to September 2023.
New Listings: The number of new listings surged by 4.9% from August, suggesting a greater supply for potential buyers.
Home Prices: The MLS® Home Price Index (HPI) saw a slight uptick of 0.1% month-over-month, though it remains 3.3% lower than last year. The national average sale price rose to $669,630, a 2.1% increase year-over-year.
The upward momentum in sales is primarily driven by key regions, including the Greater Toronto Area, Montreal, and Greater Vancouver, which have shown significant activity. Shaun Cathcart, CREA’s Senior Economist, noted that while these sales gains might not dominate headlines, they reflect a consistent pattern of recovery following the interest rate cuts.
Inventory and Market Dynamics
While sales increased, new listings outpaced them, leading to a slight dip in the national sales-to-new listings ratio, which fell to 51.3%. This ratio indicates a balanced market, but it also suggests that many buyers may be waiting for more favorable conditions before making a purchase.
As of the end of September, there were 185,427 properties listed for sale, an increase of 16.8% year-over-year, although this figure remains below historical averages. The inventory level stood at 4.1 months, still within a range that leans towards a balanced market.
Looking Ahead
The market appears poised for further adjustments as the Bank of Canada is expected to implement additional rate cuts in the near future. This could motivate more buyers to act quickly, especially with predictions of a robust spring market in 2025. James Mabey, CREA Chair, emphasizes the importance of connecting with a local REALTOR® whether you're looking to buy or sell, especially as the market dynamics evolve.
As we move into the colder months, potential buyers may find themselves in a position to negotiate better deals, while sellers could benefit from the increased inventory as they prepare for the spring surge.
The next CREA statistics package is scheduled for release on November 15, 2024, which will provide further insights into the evolving landscape of the Canadian housing market.
Conclusion
In summary, while the Canadian housing market is showing signs of life post-rate cuts, the coming months will be critical. Buyers and sellers alike should stay informed and consider their strategies carefully as we approach what is anticipated to be a lively market in 2025.