National home sales continue surging, prices rise amid falling interest rates: CREA

• By Mike Heddle
• Posted Tuesday, Dec 17, 2024 1:30 pm

National home sales continue surging, prices rise amid falling interest rates: CREA

The average sale price for November is $694,411, up 7.4% compared to last year

The Canadian Real Estate Association says the number of homes sold in November rose 26% compared with a year ago, marking the second straight month of large year-over-year gains.

A total of 37,855 homes changed hands last month across Canada, compared with 30,042 in November 2023, following a 30% year-over-year increase of sales in October.

“We’re starting to see a little bit of consumer confidence make its way into the marketplace,” said Mike Heddle, a broker for Royal LePage State Realty in Hamilton, Ont.

“With lightening in the Bank of Canada’s interest rate policy, I think that’s bringing a little bit of confidence to some of those first-time buyers and maybe ‘move-up’ buyers.”

The Bank of Canada’s half-percentage-point cut last week marked the fifth consecutive time it has lowered its policy rate since June, bringing it to 3.25%.

The association said rising home sales activity was driven by gains in Greater Vancouver, Calgary, Greater Toronto and Montreal, along with some smaller cities in Alberta and Ontario.

The national average sale price for November rose 7.4% compared with a year earlier to $694,411.

“Not only were sales up again, but with market conditions now starting to tighten up, November also saw prices move materially higher at the national level for the first time in almost a year and a half,” CREA senior economist Shaun Cathcart said in a news release.

“Normally we might expect this market rebound to take a pause before resuming in the spring; however, the Bank of Canada’s latest 50-basis point cut together with a loosening of mortgage rules could mean a more active winter market than normal.”

On a seasonally adjusted month-over-month basis, national home sales rose 2.8% from October.

The number of newly listed properties was down 0.5% month-over-month.

There were just over 160,000 properties listed for sale across the country at the end of the month, up 8.9% from a year earlier but still below historical averages for that time of year.

“There is a stronger sentiment for buyers, certainly over the last couple of weeks, than I’ve seen in the last few months,” said Heddle.

But he said a few challenges persist — the “big one” being affordability.

NerdWallet Canada spokesman Clay Jarvis said that with variable rates down and inventory up, “buyers are striking before the iron gets hot.”

Jarvis predicted the spring season will be competitive. With that in mind, some buyers may have chosen to get off the sidelines last month to avoid paying more next year when more demand leads to higher listing prices.

“Their mortgage will be a little more expensive today, but that’s a trade-off some buyers will be willing to make. Consider it an opportunity cost,” he said.

“The market’s going to finish the year on a high note. We’re not going back to the madness of December 2021, but we should see some serious sales increases compared to last year.”

In other housing news, Canada Mortgage and Housing Corp. (CMHC) says the annual pace of housing starts in November rose 8% compared with October, helped by strength in multi-unit starts in Quebec, Alberta and B.C.

The national housing agency says the seasonally adjusted annual rate of housing starts came in at 262,443 units in November, up from 242,207 in October.

The increase came as the annual pace of urban starts rose 9% to 245,083 in November compared with 224,492 in October.

The annual pace of multi-unit urban starts, such as.....[READ MORE]