Real estate sales and prices kept going down in November

Last month, housing sales continued to fall after a small pause seen in October. Meanwhile, average real estate prices also kept going down.

According to the Canadian Real Estate Association (CREA), home sales fell by 3.3% in November from the previous month and by 38.9% from a year earlier.

“November’s housing results from across Canada were quite expected and it will hardly change in winter as the central bank raised its key lending rate once again last,” – noted Shaun Cathcart, senior economist at CREA.

On a seasonally adjusted basis, real estate prices fell by 1.4% from October, and by 4.4% from a year ago.

CREA says new listings were down by 1.3% month-over-month after a 2.2% increase reported in October.

“In case of monthly new supply, we can say listings are definitely not flooding the market,” – CREA added. With the exception of 2019, November 2022 showed the fewest new listings for that month in 17 years.

Meanwhile, months of inventory kept improving and almost reached a pre-pandemic level with 4.2 months. In October, it was 3.8, and earlier this year we saw a record low of 1.6. However, CREA says it’s still a month below the long-term average number.

If we exclude the expensive markets of the Greater Toronto and Vancouver areas from the calculation, we’ll see that the average price is $509,802.

RBC’s Zeba Khan also noted that conditions in Ontario and B.C. are “more favourable to buyers” where demand-supply conditions are not that balanced.

In spite of the prices decline in November, the decreases are becoming smaller if we look at the year as a whole.

In Khan’s opinion, the slowing pace of drops means that the largest part of the market downturn has reached its end. Nevertheless, it doesn’t mean housing markets will heat up in the nearest future.

“Higher interest rates and poor affordability will keep challenging homebuyers for some time,” – Khan said. “This will restrain activity for a little longer even in case it stabilizes near today’s levels. We believe benchmark prices will continue to fall until spring.”