Canada’s topsy-turvy 2022 market came to a close with 21,840 homes trading hands nationally as home prices stagnated on a national level with mild changes in individual cities, according to the Canadian Real Estate Association (CREA).
Home Prices Stay Flat in Most Major Markets Despite Declining Sales Numbers
Home prices have declined mildly in some markets but overall, have flattened nationally. The national average home price was $626,316 in December, down just 1.02% from November’s $632,802. There has been a 12% drop year-over-year from December 2021’s price of $711,579. However, some areas have experienced monthly gains in prices. Saint John’s average price increased by 6.5% to $284,899. Calgary’s price also grew by 2.7% to $518,341. These gains have been mitigated by decreases in areas like the Niagara Region, where the average price has fallen by 4% to $637,456.
21,840 homes traded hands in December, down 27.5% from November, with 8,295 fewer residential sales on a national level. The winter market does tend to see less activity than the rest of the year, with the added strain of the holidays and cold, Canadian weather getting in the way of potential moving plans. Year-over-year there was a much larger drop of 39.1% from 35,860, but this is to be expected with the market conditions loosening a lot throughout 2022 due to the rise in interest rates.
Inventory is Improving but Remains Canada Housing’s Biggest Problem
One of the overriding themes of 2022 was the lack of inventory available for potential buyers. In January and February, the level of inventory available was at the lowest levels ever recorded with just 1.6 months. As interest rates have increased, and fewer homes have traded hands in the last 10 months, that number has improved steadily. Currently, there are 4.2 months of inventory available, and while still about a month short from the long-term average, this number is close to where it was prior to the Covid-19 lockdowns. “Demand
for housing continues to grow and supply remains the biggest issue across the entire spectrum,” said CREA’s senior economist Shaun Cathcart. “Whether that plays out in the rental market in 2023 or shifts back over into the ownership space is a matter of how quickly the Bank of Canada can get inflation under control and starts turning the dial back down on borrowing costs.”
Despite the increase in inventory, the number of new listings was down month-over-month.. 24,415 homes were listed during December across Canada, a steep decline of 50.4% from November’s figure of 49,175 new listings. The sales-to-new-listings ratio for Canada is currently 59.3%, right on the cusp of a market that favours buyers.
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