On Friday, April 14, the Canadian Real Estate Association (CREA) released its national housing statistics for the month of March 2023. Below, CREA’s Senior Economist Shaun Cathcart provides an update on the current state of housing markets in Canada and explains what the data means for members:
Something is about to happen in Canadian housing markets; in fact, it’s probably already happening. The question is what exactly?
Rob Carrick referred to the housing market as a “coiled spring” in a recent Globe and Mail article. I wish I had thought of that turn of phrase because it’s the perfect one right now.
That “coiled” energy has been, quite predictably, wreaking havoc in rental markets this last year, but I think it’s now poised to re-emerge—spring forward if you will—back into the resale housing market.
Interest rates are at a peak, at least according to the latest Bank of Canada update, and, as of March, prices appear to have bottomed out. Those were the two milestones I had identified last year as being the most critical to any type of recovery.
I wrote last month about all the “green shoots” I was seeing in the data. Those continued to grow and expand in March, with one exception—new listings.
New supply is now running at a 20-year low. Seasonally adjusted new listings have plunged 30% in just the last 10 months, a record drop if you don’t count the first months of the COVID-19 pandemic when there was no market at all.
The question is: are we seeing the tide going out before it comes back in, or just a market where prospective sellers have nowhere else to move to?
The answer will be revealed over the next couple of months. The demand is there. How much of that plays out on the sales side as opposed to the price side will depend on how many homes come up for sale in the months ahead.
Either way, buckle up!
