June 1, 2022
On a seasonally adjusted basis, home sales decreased 12.6% from March to April, a second monthly decline in a row. Despite this pullback, the resale market remained very active on a historical basis, standing above the historically high level of 45K now for 22 consecutive months.
This seems to be the beginning of a downward trend as 80% of covered markets experienced a decline during the month.
The recent drop in the resale market is in part due to the increase in fixed mortgage interest rates which are consequently leading to more restrictive stress tests. The effect on variable rates should begin to be felt in the coming months and accentuate the slowdown.
New listings decreased by 2.2% during the month. However, the reduction in sales compensated for the decrease in new properties for sale, so that the number of months of inventory rose from 1.9 to 2.2 months in April.
Based on the active-listings-to-sales ratio, market conditions loosened during the month but the housing market continued to be tight in 8 of the 10 provinces, with only Saskatchewan and B.C. (the latter switched this month) indicating a balanced market.
Housing starts in Canada increased by 18.9K in April to 267.3K (seasonally adjusted and annualized), the strongest print since November 2021 (at 305.9K) and above consensus expectations calling for a 245.7K print. All told, housing starts continue to stay well above the historical average.
The Teranet-National Bank Composite National House Price Index increased 2.0% in March compared to February after seasonal adjustment, the second-highest monthly increase on record. Ten of the 11 markets in the composite index were up during the month: Halifax (5.4%), Hamilton (3.3%), Toronto (2.7%), Ottawa-Gatineau (2.4%), Victoria (1.9%), Vancouver (1.5%), Winnipeg (2.4%), Montreal (1.1%), Edmonton (0.6%) and Calgary (0.5%). Only Quebec City was down (-0.6%).
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