By Ketki Saxena
Investing.com – Earlier today, The Canadian Real Estate Association released Canadian housing market data for December, which showed a jump in activity both on a monthly and annual basis.
Prices, while moderating on a monthly basis in December, continued to rise year over year.
Listings meanwhile continued to drop, indicating a further contraction in Canada’s already constrained housing supply.
Perhaps most importantly to Canadian homeowners, both current and prospective, CREA also released its forecast for Canadian housing prices and activity in 2024.
Canadian Housing Market December Data
Sales: National home sales jumped 8.7% month-over-month in December 2023. Year over year, on an actual (not seasonally adjusted) sales were 3.7% higher than in December 2022.
Listings: The number of newly listed properties dropped 5.1% month-over-month in December 2023.
Prices: The MLS® Home Price Index (HPI) dropped by 0.8% in December month over month, was up 0.7% year-over-year. The actual (not seasonally adjusted) national average sale price was up 5.1% year over year in December, to $657,145.
Does December Data indicate the expected recovery in Canadian housing?
Shaun Cathcart, CREA’s Senior Economist, asks the question that everyone wants to know the answer to: “Was the December bounce in home sales the start of the expected recovery in Canadian housing markets?”
The answer, Cathcart says, is “Probably not just yet”.
"It was more likely just some of the sellers and buyers that were holding onto unrealistic pricing expectations last fall finally coming together to get deals done before the end of the year.”
Cathcart notes that while CREA still forecasts a recovery in housing demand in 2024, “We’ll have to wait a few more months to get a sense of what that ultimately looks like.”
This is a viewpoint reinforced by Larry Cerqua, Chair of CREA, who notes that “While December did offer up a bit of a surprise in sales numbers to cap the year, the real test of the markets’ resilience will be in the spring.”
What’s the forecast for the Canadian housing market in 2024?
With the caveat that spring numbers will solidify the forecast, CREA did reveal its expectations for the Canadian housing market in 2024.
This year, CREA expects sales activity to jump 10.4% from 2023, expecting 489,661 residential properties to trade hands.
The national average home price meanwhile is forecast to rise 2.3% on an annual basis to $694,173.