Housing market update: January 2024

The Canadian housing market continues its seasonal lull, but housing activity (and prices) are expected to pick up again in the spring.

• The Canadian Real Estate Association (CREA) reports that the national average home price was $646,134 in November, down 2% from October but up 2% year over year.
• CREA also reports a 0.9% drop in month-over-month home sales in November, marking the fifth straight monthly decline. However, this has been the smallest decline since July.
• The country’s sales-to-new-listings ratio (SNLR) in November was 49.8%, meaning neither buyers nor sellers enjoyed an obvious advantage. For its part, Ontario's market became more balanced as its SNLR increased from 37% in October to 44% in November.
• As a result, says Larry Cerqua, Chair of CREA, “I wouldn’t expect anything too headline-grabbing from the resale housing market for the next few months.”
• In line with this finding, a recent Reuters poll of economists forecasts that the Bank of Canada will start cutting interest rates in Q2 2024. The BoC’s benchmark interest rate has held steady at 5% since July 2023, and about 70% of economists predict it will drop to 4.0% or lower by the end of the year. Lower interest rates could increase demand for housing, but if consumers expect them to fall in the near future, they may put off purchases.
• According to Rentals.ca, the average national asking rent in November was $2,174, down 0.2% from October's record high of $2,178.
• Despite a 0.2% rise to $2,913 from the previous month, year-over-year asking rents in Toronto fell for a second consecutive month in November.
• This cooldown in the rental market is likely temporary, as experts say rents will either stay high or rise for as long as there is a housing shortage.
• Construction is slow-going, with total monthly housing starts up just 0.7% from 255,876 units in October to 257,777 in November, according to the Canada Mortgage and Housing Corporation.

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More rental market headlines

Toronto rental arrangements still questionable despite slower market – Storeys

Rentals.ca to Launch New Rental Housing Index with Statistics Canada – Rentals.ca

Condo builder plans to build rental-only detached houses in Ontario – The Globe and Mail