Canadian Existing Home Sales (March 2024)

Modest home sales activity in March

• Canadian existing home sales edged higher by 0.5% month-on-month (m/m) in March, leaving them 8% below their pre-pandemic level. Nation-wide, sales were driven higher by gains in Alberta (+3.6% m/m) and Quebec (+2.4%), offset by a decline in Ontario (-1.6%).
• Canadian new listings dropped 1.6% m/m in March and were slightly below their long-term trend. However, the Canadian sales-to-listings ratio moved a touch higher to 57.4% - leaving it roughly in line with its long-term average.
• Canadian average home prices inched higher by 0.2% m/m in March. Prices were higher in B.C. (1.8%) and Ontario (0.8%) while showing softer performances in Alberta (0.6%) and Quebec (0.2%). Meanwhile, notable declines were recorded across much of the Atlantic and parts of the Prairies.
• The MLS home price index, a more "like for like" measure, declined by 0.3% m/m. Prices for detached units were down 0.1% m/m, while condo prices were down 0.6% m/m.  

Key Implications

• We’d been expecting the so-called "spring selling season" to be subdued this year, and March's data suggests a modest start. However, the data could have been negatively impacted by an early Easter this year. For their part, CREA noted a jump in listings in the first part of April, which could portend stronger sales activity this month. However, the recent surge in bond yields could hinder this momentum and higher frequency indicators that we track suggest a more restrained performance. It's also worth noting that supply/demand balances indicate that loose conditions persisted in B.C. and Ontario in March, potentially restraining price gains this month.
• We're expecting firmer sales and home price growth in the second half of the year, as the Bank of Canada should be cutting rates by the summer. This should fuel above-average growth in Canadian home sales and average home prices, although affordability pressures will likely keep the gains from being even stronger.

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