Canada saw the highest home sales since 2022 last month, according to the Canadian Real Estate Organization, with the Toronto and Vancouver markets leading the charge.
The housing markets of both cities saw 44% and 30% year-over-year increases, respectively.
The report released last week noted that nationwide sales in October were the highest they’ve been since the peak of April 2022.
“The jump in home sales last month was definitely an October surprise, although with the big interest rate cut of 50 basis points announced during the last week of the month, the increase was more likely related to the surge in new listings we saw in September,” said CREA’s senior economist Shaun Cathcart.
“There probably won’t be another rush of new supply like that until next spring, and at that point, mortgage rates should be close to their expected lows, as well. With that in mind, you can think of the October numbers as a sort of preview for what we might expect to see next year.”
National home sales increased 7.7% on a month-over-month basis overall and surged a whopping 30% last month from October 2023 (not seasonally adjusted).
It’s a massive jump, especially compared to the 1.9% increase month-over-month seen in September and 1.3% in August, despite the Bank of Canada’s consecutive rate cuts.
While the central bank has made four interest rate cuts since June, CREA attributes the bustling market to an increase in the number of houses being listed.
September saw an increase of 4.8% in new listings for a total of 185,127. However, the number of listings dipped by 3.5% month-over-month in October, dropping the total active listings to 174,458.
The decrease was spurred on by a decrease in listings in the Greater Toronto Area, a major player in the housing market.
Still, that figure marked an 11.4% increase from last year.
While the sales-to-new listings ratio tightened in October to 58%, up from 53% the month before, sales continued to rise as listings fell.
A balanced housing market typically aspires to have a ratio between 45% and 65%, with the current long-term average at 55%.
The National Composite MLS® Home Price Index reported a small decrease in home sale prices, down 0.1% from September.
However, home prices have remained relatively stagnant since the beginning of the year.
The HPI was down 2.7% last month compared to last October on a non-seasonally adjusted basis, however, on an actual basis, it’s up 6%.
The current average national home price in October was $696,166, up from $669,630 in September.
CREA Chair James Mabey predicts that October’s positive sale trends will continue into next year, as long as the listings can keep pace.
“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 Mabey.
“The extent to which that will be able to continue between now and next spring will depend on the number of listings coming onto the market.”