National home sales in 2023 lowest since 2008 despite December ‘bounce,’ CREA says

Canada’s housing market is seeing some of the lowest annual sales volumes in more than a decade, according to the latest statistics from the Canadian Real Estate Association, even though December saw a jump in sales compared to the month before.

In a statement, CREA noted that the annual home sales total of 443,511 units in 2023 was a decline of more than 11 per cent compared to 2022, and “technically the lowest annual level for national sales activity since 2008.”

Pricing-wise, the national average sale price was 5.1 per cent higher in December 2023 compared to December 2022. But by some of the real estate board’s calculations, prices dropped at the end of 2023 compared to November.

However, when compared to November 2023, national home sales were up by 8.7 per cent in December.

Soft housing market expected for 1st half of 2024, but only in some parts

The Canadian housing market is expected to remain soft at least for the first part of 2024 while interest rates remain high. But some parts of the country will see busy markets as investors look for lower prices outside of Toronto and Vancouver, forecasters say.

CREA is cautioning this may not be the start of a trend.

“Was the December bounce in home sales the start of the expected recovery in Canadian housing markets? Probably not just yet,” said Shaun Cathcart, senior economist for CREA, in a press release.

TD Bank economist Rishi Sondhi agrees, writing last week that Canadians should be “cautious in drawing too many conclusions from December data,” as it’s usually a month with lower sales that could have been boosted by warmer-than-usual weather at the tail end of 2023.

Some GTA markets in winter lull

Robert Marsiglio, a real estate agent in Whitby, Ont., points out potential buyers and sellers “kind of pack it in” during the winter months, making real estate markets slower, but it hadn’t been as busy as he’d expect from previous years.

He told CBC News that the conversation with buyers has changed, too. In 2021 and early 2022, clients typically said “let’s go to the top of our budget,” while today’s buyer is asking him, “How little can I get this house for?”

“What a buyer is willing to offer on a property and what a seller is expecting, there’s a gap that needs to be bridged somehow,” said Marsiglio.

“The only way you make that up is these buyers start earning more money overnight, rates come down magically or home prices correct to levels where things are relatively affordable again.”

While Marsiglio was speaking in early January, before statistics were released, his impressions have been borne out by the CREA data.

The number of newly listed properties across Canada in December 2023 was more than five per cent lower than in November.

Calgary: cold weather, hot real estate market

Some real estate markets in Alberta are seeing a very different trend from the Greater Toronto Area when it comes to pricing.

Calgary-based mortgage broker Max Singh said there’s “a lot of demand” in his city, in particular when compared to the rest of the country. However, a common denominator is a lack of sellers listing their homes.

“Rising values and limited supply are certainly a challenge for a majority of clients at this time,” said Singh.

“We’re just getting used to the type of environment that existed in the Ontario and B.C. markets for years and years,” he said, pointing out that multiple bids on homes in Calgary are common these days.

Singh also noted that many buyers who are keeping those Alberta markets red hot are not from the province.

“We’ve seen a lot of deep-pocket, out-of-province investors who can easily snap up properties and sweep some of those local folks off their feet with … large, incredibly strong offers,” he said.