Housing market tightens in October with fewer listings and rising sales, CREA data reveals
Canadian home sales in October reached their highest level since April 2022, supported by interest rate cuts from the Bank of Canada.
BNN Bloomberg reported a 7.7 percent increase in transactions compared to the previous month, based on data released by the Canadian Real Estate Association (CREA).
The benchmark price for a home slightly declined by 0.1 percent to $716,800, according to the same data.
New listings dropped by 3.5 percent in October, partially reversing a nearly 5 percent increase in the previous month. This decline contributed to a tightening in market conditions.
Months of inventory, a metric that reflects the time needed to sell all current listings at the current pace of sales, fell from 4.1 months in September to 3.7 months in October.
“October’s strong sales numbers across Canada suggest buyers have been in the market since rates began to fall in early summer, but they were waiting for the right property to come up for sale, which didn’t happen in a big way until September,” said James Mabey, chair of CREA.
The Bank of Canada implemented its most significant rate cut since March 2020 last month, aiming to boost economic activity.
Policymakers indicated that lower borrowing costs are expected to benefit the housing sector more rapidly than other areas of the economy. The central bank has also hinted at the possibility of additional rate cuts.
Shaun Cathcart, CREA’s senior economist, commented on the unexpected sales activity in October. “The jump in home sales last month was definitely an October surprise,” he said.
“You can think of the October numbers as a sort of preview for what we might expect to see next year.”
The performance of the housing market in October supports the likelihood of further rate reductions.
BMO strategist Benjamin Reitzes said the strength of sales aligns with expectations for the central bank to cut its benchmark interest rate by 25 basis points at its December meeting.
While home prices eased slightly last month, the combination of higher sales, tightening supply, and ongoing rate cuts signals a potentially active housing market in the months ahead.
