The average price of a home in the GTA fell to $1,078,500 in January. Andrew Francis Wallace /Star file photo
Home sales in Canada saw a consecutive rise for the second month, accompanied by declining prices, as revealed by the Canadian Real Estate Association (CREA) on Wednesday. The surge in sales, attributed partly to favorable weather conditions and speculation about potential interest rate cuts, marks a turnaround from previous trends.
January witnessed a 3.7 percent increase in sales compared to the previous month after adjusting for seasonal variations. Moreover, sales surged by 22 percent compared to the same period last year when the market experienced subdued activity. December also saw an 8.7 percent increase in activity from the preceding month.
Shaun Cathcart, a senior economist at CREA, noted that while the rise in sales is contributing to a more balanced market, regions experiencing significant sales growth are witnessing a downward trend in prices. He sees this as indicative of a market gradually emerging from a two-year period of weakness.
In the Greater Toronto Area (GTA), despite a 10 percent increase in the number of homes sold, the average price of benchmark homes declined by 1.2 percent in January. The average price dropped to $1,078,500, reflecting a 7.2 percent decrease since June.
Nationally, 41,534 homes were sold in January, marking a 3.7 percent rise from December. However, this figure remains approximately 9 percent below the ten-year average of monthly sales, as highlighted in the CREA report. The national aggregate Home Price Index also experienced a 1.2 percent decline in January compared to December.
Rishi Sondhi, an economist at RBC, attributed the rise in home sales to falling prices, suggesting that sellers may have adjusted their prices to attract buyers. This trend is particularly notable in traditionally slow months like December and January.
Robert Kavcic, an economist at BMO, echoed similar sentiments, anticipating potential price increases with the onset of the spring buying season. He emphasized the significance of monitoring market dynamics in March and beyond, especially in anticipation of a potential rate cut by the Bank of Canada.
The Canadian real estate market is displaying "early signs of life," according to CREA chair Larry Cerqua, indicating substantial pent-up demand. However, veteran real estate consultant John Andrew cautioned that the spring market might not be as robust as anticipated if rate cuts are delayed.
Despite uncertainties surrounding interest rates, real estate markets have demonstrated resilience, with prices remaining relatively stable despite market fluctuations.
