Home Sales Falling Faster Than Listings

Home sales recorded over Canadian MLS Systems dropped by 12.6 per cent between March and April 2022, says the Canadian Real Estate Association (CREA). The decline placed monthly activity at the lowest level since the summer of 2020. The national decline was led by the Greater Toronto, ON, Area (GTA) simply because of its size. Sales were down in 80 per cent of local markets, with most other large markets posting double-digit month-over-month declines in April. The exceptions were Victoria, BC; Montreal, QC; and Halifax-Dartmouth, NS; where sales edged up slightly. The actual (not seasonally adjusted) number of transactions in April came in 25.7 per cent below the record for that month set last year. That said, as has been the case since last summer, it was still the third-highest April sales figure ever behind 2021 and 2016. "Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue," says Jill Oudil, chair of CREA. "For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies. The number of newly listed homes edged back by 2.2 per cent on a month-over-month basis in April. The small monthly decline was the result of a fairly even split between markets where listings rose and those where they fell. With sales falling by quite a bit more than new listings in April, the sales-to-new listings ratio eased back to 66.5 per cent ‒ its lowest level since June 2020. This reading is right on the border between what would constitute a seller's and a balanced market. The long-term average for the national sales-to-new listings ratio is 55.2 per cent. There were 2.2 months of inventory on a national basis at the end of April, still historically very low, but up from slightly lower readings in the previous eight months. The long-term average for this measure is a little over five months.