Canadian home sales continue to pick up steam in May
Ottawa, ON, June 15, 2023 – Statistics released today by the Canadian Real Estate Association (CREA) show national home sales were up again on a month-over-month basis in May 2023.
National home sales climbed 5.1% month-over-month in May.
Actual (not seasonally adjusted) monthly activity came in 1.4% above May 2022.
The number of newly listed properties rose 6.8% month-over-month but is still historically low.
The MLS® Home Price Index (HPI) climbed 2.1% month-over-month but was still down 8.6% year-over-year.
The actual (not seasonally adjusted) national average sale price posted a 3.2% year-over-year increase in May.The actual (not seasonally adjusted) national average sale price posted a 3.2% year-over-year increase in May.
Home sales recorded over Canadian MLS® Systems posted a 5.1% increase between April and May 2023, building on the double-digit jump in April and smaller gains in February and March. (Chart A) Sales were up in about 70% of all local markets, including Canada’s largest markets: the Greater Toronto Area (GTA), Montreal, Greater Vancouver, Calgary, Edmonton, and Ottawa.
The actual (not seasonally adjusted) number of transactions came in 1.4% above the same time last year. While this was a small gain, it was notable in that it was the first national year-over-year sales increase in almost two years (since June 2021).
“The rebound has been evident for a number of months at this point, but May really drove the point home with year-over-year comparisons for both national sales activity and national average home price back in positive territory,” said Larry Cerqua, Chair of CREA. “That being said, the degree to which a recovery will be able to play out on the sales side as opposed to the price side will come down to supply, which remains quite low. If you’re looking for information and guidance about how to buy or sell a property in your local market, contact a REALTOR® in your area,” continued Cerqua.
“A rebound in housing activity this year was never really in doubt because we knew the demand was there – the only question was around timing and that was answered this spring,” said Shaun Cathcart, CREA’s Senior Economist. “The 2023 housing puzzle piece that was less obvious was the reluctance of existing owners to take advantage of a slower market to make a move because they don’t want to mess with the ultra-low fixed rates they locked in during the COVID-19 pandemic. Without existing owners supplying the market with new listings, this housing demand rebound may play out more acutely than might have been expected on the price side this year.”
The number of newly listed homes was up 6.8% on a month-over-month basis in May; although, the bigger picture is that new supply is still running at historically low levels.
With sales and new listings up by similar magnitudes in May, the sales-to-new listings ratio was 67.9%, little changed from 69% in April. The long-term average for this measure is 55.1%.
There were 3.1 months of inventory on a national basis at the end of May 2023, down from 3.3 months at the end of April and down more than a full month from the most recent peak at the end of January. The long-term average for this measure is about five months.
The Aggregate Composite MLS® Home Price Index (HPI) climbed 2.1% on a month-over-month basis in May 2023 – a large increase for a single month and on the heels of a similar gain in April. Once again, it was also very broad-based, with a monthly increase in prices between April and May observed in the majority of local markets.
The Aggregate Composite MLS® HPI now sits 8.6% below year-ago levels, a smaller decline than in January, February, March, and April. (Chart B)
The actual (not seasonally adjusted) national average home price was $729,000 in May 2023, up 3.2% from May 2022. This was the first year-over-year gain in this measure in 12 months. The national average price has recovered by more than $116,000 since January 2023 owing in large part to outsized sales rebounds in the GTA and B.C. Lower Mainland. Excluding the GTA and Greater Vancouver from the calculation cuts almost $150,000 from the national average price.