Home sales up in major metro areas as buyers bet on rate cuts later this year

Houses for sale in Ottawa

Sentiment appears to be improving in major real estate markets across the country, with most reporting an increase in sales activity in February.

On an annual basis, February home sales were up by double digits in Toronto (+18%), Vancouver (+14%), Montreal (+30%), Calgary (+22%) and Ottawa (+17%).

While Toronto activity was down by 12% on a seasonally adjusted monthly basis, the Toronto Regional Real Estate Board (TRREB) noted that monthly data can be volatile, “especially when the market is approaching a transition point.”

While activity remains low compared to historical norms—in Vancouver, for example, sales are 23.3% below its 10-year average—real estate boards say sentiment is improving among both buyers and sellers, leading to overall higher sales and more listings hitting the market.

“We have recently seen a resurgence in sales activity compared to last year,” noted TRREB President Jennifer Pearce. “The market assumption is that the Bank of Canada has finished hiking rates [and] consumers are now anticipating rate cuts in the near future.”

In Calgary, continued strong activity led to a 15% decline in active listings. “Purchasers are acting quickly when new supply comes onto the market, preventing inventory growth in the market,” said Ann-Marie Lurie, chief economist at the Calgary Real Estate Board.

Home sales expected to pick up throughout the year

In addition to potential interest rate cuts on the horizon later this year, continued strong population growth and the ongoing supply-demand imbalance are expected to lead to stronger housing activity over the course of the year, experts say.

“I continue to believe that we’ll see a pretty good spring market due to improving sentiment,” analyst Ben Rabidoux of Edge Realty Analytics wrote in his newsletter to clients.

He pointed to not only a rise in overall consumer confidence as measured in weekly surveys by Bloomberg and Nanos, but specifically improved sentiment towards real estate.

“We think a pivot towards rate cuts mid-year will get the wheels turning faster over the second half—perhaps even sooner,” Robert Hogue of RBC Economics wrote recently.

“There will be a lot of pent-up demand to satisfy once confidence returns, which could heat things up in a hurry,” he added. “However, poor affordability conditions will restrain the recovery and make it a gradual liftoff.”

Regional housing market roundup

Here’s a look at the February statistics from some of the country’s largest regional real estate boards:

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Greater Toronto Area

Toronto real estate marketToronto real estate market
February 2024 YoY % Change
Sales 5,607 +17.9%
Benchmark price (all housing types) $1,108,720 +1.1%
New listings 11,396 +33.5%
Active listings 11,102 +15.1%
Source: Toronto Regional Real Estate Board (TRREB)

“As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs,” said TRREB Chief Market Analyst Jason Mercer.

“In the second half of the year, lower interest rates will further boost demand for ownership housing,” he added. “First-time buying activity will also be a contributing factor, as many renters look to trade high monthly rents for a long-term investment in which they can live and build equity.”


Greater Vancouver Area

Vancouver housing marketVancouver housing market
February 2024 YoY % Change
Sales 2,070 +13.5%
Benchmark price (all housing types) $1,183,300 +4.5%
New listings 4,560 +31.1%
Active listings 9,634 +16.3%
Source: Greater Vancouver Realtors (GVR)

“While the pace of home sales started the year off briskly, the pace of newly listed properties in January was slower by comparison,” said Andrew Lis, Director of Economics and Data Analytics at Greater Vancouver Realtors, formerly the Real Estate Board of Greater Vancouver.

“A continuation of this pattern in February would have been concerning, as it could quickly tilt the market towards overheated conditions,” he added.


Montreal Census Metropolitan Area

Montreal housing marketMontreal housing market
February 2024 YoY % Change
Sales 3,843 +30%
Median Price (single-family detached) $550,000 +7%
Median Price (condo) $395,000 +4%
New listings 6,769 +32%
Active listings 18,110 +18%
Source: Quebec Professional Association of Real Estate Brokers (QPAREB)

“This is the first time since 2004 that we have seen a surge in new listings of over 36 per cent in a month of February,” said Charles Brant, QPAREB Market Analysis Director.

“More homeowners are counting on the imminent drop in interest rates to put their property up for sale,” he added. “Moreover, increasing numbers have no choice but to put their property up for sale, as they are squeezed by monthly mortgage payments which are at unsustainable levels in a much less favourable economic context.”

Calgary

Calgary housing marketCalgary housing market
February 2024 YoY % Change
Sales 2,135 +22.8%
Benchmark price (all housing types) $585,000 +10.3%
New listings 2,711 +13.6%
Active listings 2,355 -14.2%
Source: Calgary Real Estate Board (CREB)

“Purchasers are acting quickly when new supply comes onto the market, preventing inventory growth in the market,” said CREB Chief Economist Ann-Marie Lurie. “It is this strong demand and low supply that continues to drive price gains in Calgary. The biggest supply challenge is for homes priced under $500,000, which saw inventories fall by 31% compared to last February.”


Ottawa

Ottawa housing statisticsOttawa housing statistics
February 2024 YoY % Change
Sales 629 +16.5%
Benchmark price (all housing types) $628,500 +2.8%
New listings 1,539 +29.5%
Active listings 2,158 +16.3%
Source: Ottawa Real Estate Board (OREB)

“Even with higher prices and the interest rate holding steady, Ottawa is a strong, active market,” said OREB President Curtis Fillier. “With metrics across the board up from last year, it’s clear both buyers and sellers are making moves. The metrics, however, don’t tell us about all the people relegated to the sidelines because affordability remains out of reach for many.”

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