With monthly activity increasing again, is the housing market on the up?
Home sales in Canada increased by 1.4% on a monthly basis in March, marking the first consecutive monthly gain in over a year, according to the Canadian Real Estate Association. The increase suggests that the housing market is gaining momentum for the spring. New listings fell by 5.8% month over month, causing the supply to hit a 20-year low. The sales-to-new listings ratio rose to 63.5%, indicating a tight market, and the number of months of inventory on a national basis declined from 4.1 months in February to 3.9 last month. The MLS Home Price Index rose by 0.2% on a monthly basis but was still down 15.5% from the same period in 2022.
Why Aren’t Canadian Real Estate Owners Selling?
The Canadian housing market is experiencing a lack of new property listings for sale in the busy spring season, with the mid-month data suggesting scarce sellers in every market, according to brokers. The cause of this is a range of factors including the lack of reasons to sell, the fact that the mortgage market has a major buffer, and the excessive costs of moving. BMO Capital Markets suggests that the issue of the lack of new listings for sale could be a bigger problem than low sales, particularly in Toronto, where the region had the slowest month for new listings since 2001.
Canada’s Housing Market Correction Is Over
Canada’s housing market has begun to recover after a year-long correction, with the aggregate price of a home in Canada rising 2.8% quarter over quarter in Q1 2023, according to the latest Royal LePage House Price Survey. Home sales have been trending upwards in major markets since the start of the year, with sales increasing by at least 52% from January to February in the Greater Toronto Area, Greater Montreal Area, and Greater Vancouver. However, there remains a chronic shortage of supply across the country. Royal LePage has revised its forecast for Canadian home prices, predicting that the national aggregate price of a home will increase 4.5% in Q4 2023 compared to Q4 2022.
Kitchener annual average rents up 21% for condo rentals, apartments
The average asking rent for all property types in Canada increased by 10.8% annually in March to $2,004, with a 1% month-over-month increase. This shows how rental housing demand is outstripping supply in Canada. Kitchenerw ranked 15th on the list of 35 cities for average monthly rent in March for a one-bedroom at $1,925 and 13th for a two-bedroom at $2,396. Other Ontario cities like Hamilton, Kitchener, and St. Catharines also saw significant annual rent increases for condo rentals and apartments. Average rents in March for purpose-built and condominium apartments in Barrie, Cambridge, Guelph, and Kitchener ranged from $2,195 to $2,363.