Canadian Home Sales Tick Up in September Following Interest Rate Cuts
The Canadian real estate market showed signs of renewed activity in September, with national home sales increasing slightly compared to August. This upward trend follows the Bank of Canada’s third interest rate cut of the year, echoing the gains witnessed in the months following the previous two rate reductions.
“Sales gains are now three for three in the months following interest rate cuts, which is a trend even though the increases weren’t headline-grabbing,” commented Shaun Cathcart, CREA’s Senior Economist. However, he cautioned that with the anticipated acceleration in the pace of rate cuts, some buyers might decide to hold off on making a purchase for now. This could lead to a further surge in the rebound expected in 2025, at the expense of the final few months of 2024.
Key Highlights:
* National home sales rose by 1.9% month-over-month in September.
* Actual (non-seasonally adjusted) monthly activity surpassed September 2023 levels by 6.9%.
* The number of newly listed properties surged by 4.9% month-over-month.
* The MLS® Home Price Index (HPI) edged up by a mere 0.1% month-over-month, but still showed a year-over-year decline of 3.3%.
* The actual (non-seasonally adjusted) national average sale price increased by 2.1% year-over-year in September.
The surge in new listings, driven by an influx of sellers in the initial weeks of September, contributed significantly to the increase in overall inventory. Notably, the Greater Toronto Area and Hamilton-Burlington, Montreal and Quebec City, as well as Greater Vancouver and Victoria, led the national increase in home sales.
Despite the uptick in sales, the national sales-to-new listings ratio eased to 51.3% in September, down from 52.8% in August. This could shift if the influx of new listings translates into higher sales in October.
“The beginning of September saw a burst of new supply for buyers to choose from before things generally quiet down for the winter,” explained James Mabey, CREA Chair. “While some buyers may choose to take advantage, others may be inclined to wait as the bulk of future rate cuts from the Bank of Canada are now expected to show up in a matter of months as opposed to years. Whether you’re looking to buy or sell a property this fall or getting ready for what promises to be a big spring market next year, the first step is always to contact a REALTOR® in your area.”
Inventory and Price Trends:
* There were 4.1 months of inventory on a national basis at the end of September 2024, down from 4.2 months at the end of August.
* The long-term average for inventory stands at 5.1 months, with a seller’s market typically characterized by less than 3.6 months of inventory and a buyer’s market by over 6.5 months.
* The National Composite MLS® Home Price Index (HPI) saw a marginal increase of 0.1% from August to September. However, the overall trend indicates that prices at the national level have remained largely flat since the beginning of the year.
* The non-seasonally adjusted National Composite MLS® HPI was 3.3% below September 2023, representing a smaller decline compared to the 3.9% decreases observed in July and August.
* The actual (non-seasonally adjusted) national average home price stood at $669,630 in September 2024, up 2.1% from September 2023.
The next CREA statistics package is scheduled for release on Friday, November 15, 2024.
About the Canadian Real Estate Association (CREA)
CREA is one of Canada’s largest single-industry associations, representing over 160,000 REALTORS® through 65 real estate boards and associations. For more information, visit http://CREA.ca/statistics.