National home sales surge in April but still down from a year ago: CREA

National home sales surged 11.3 per cent month-over-month in April but were down 19.5 per cent from a year ago, according to a report released by the Canadian Real Estate Association on Monday.

CREA said the number of newly listed properties edged up 1.6 per cent month-over-month but remain at a 20-year low and the ML Home Price Index climbed 1.6 per cent month-over-month but was down 12.3 per cent year-over-year.

The national average sale price posted a 3.9 per cent year-over-year decline in April, added the report.

“Over the last few months, there have been signs that housing markets were going to heat back up this year, so it wasn’t a surprise to see things take off after the Easter weekend, which often serves as the opener to the spring market,” said Larry Cerqua, CREA’s 2023-2024 Chair. “The issue going forward is not new: demand is once again returning at a scale that is outpacing supply.”

“With interest rates at a top, and home prices at a bottom, it wasn’t all that surprising to see buyers jumping off the sidelines and back into the market in April,” said Shaun Cathcart, CREA’s Senior Economist. “Supply, on the other hand, has been sluggish, hence the price gains from March to April seen all over the country. Looking ahead, the first week of May did see a bit of a burst of new supply, suggesting some of those April buyers were existing owners now looking to sell their current homes. That could make for the kind of virtuous circle that might ultimately get more first-time buyers into the ownership space this year.”

With sales gains vastly outpacing new listings in April, the sales-to-new listings ratio jumped to 70.2 per cent, up from 64.1 per cent in March. The long-term average for this measure is 55.1 per cent, said CREA, adding there were 3.3 months of inventory on a national basis at the end of April 2023, down half a month from 3.8 months at the end of March. The long-term average for this measure is about five months.

It said the Aggregate Composite MLS HPI now sits 12.3 per cent below year-ago levels, a smaller decline than recorded in January, February, and March

The  national average home price was $716,000 in April 2023, down 3.9 per cent from April 2022, but up $103,500 from January 2023, a gain owed to outsized sales rebounds in the GTA and B.C. Lower Mainland. Excluding the GTA and Greater Vancouver from the calculation cuts more than $144,000 from the national average price, said the report.

Rishi Sondhi, Economist with TD Economics, said home sales continue to bounce back (with some force) from the multi-decade low observed at the beginning of the year.

“Support has come from solid job markets, lower interest rates and improving buyer psychology from a central bank that’s on pause. Notably, considering the surge in April housing starts reported earlier in the morning, it seems likely that both home buying and homebuilding supported GDP growth last month,” he said.

“An improving demand backdrop is helping boost home prices, even as affordability remains significantly strained. However, subdued supply is probably playing an even larger role in pushing prices higher. Strikingly, even with April’s mild gain, new listings remain around a 20-year low. As a result, markets have moved even further into seller’s territory (a considerable tightening from even a few months ago), flagging further price gains in coming months.”

Mario Toneguzzi

(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)