Canada-wide residential property sales soared 11.3% between March and April as the real estate market appeared to recover even as supply remained at a 20-year low, the Canadian Association reported Monday. real estate (ACI).
Seasonally adjusted sales for the month totaled 38,164 units, compared to 34,277 units in March, the association said. However, the actual number of homes sold last month was 44,059, down 19.5% from a year earlier.
The year-over-year decline in sales was significantly less than those reported in recent months, CREA pointed out, which attributed it to home prices, which many said recently bottomed. while interest rates have climbed eight times over the past year. “With interest rates at their highest and property prices at their lowest, it’s not that surprising to see buyers returning to the market in April,” said Shaun Cathcart, senior economist at the ICA in a press release. “The supply, on the other hand, is slow to show up, which explains the price increases observed from March to April across the country. »
The seasonally adjusted number of new listings edged up 1.6% to 54,355 in April from March. The actual number of new registrations reached 67,472, about 26% less than a year ago.
The first week of May, which was not included in CREA’s April data, showed a jump in new registrations, Cathcart said. He thinks the rise suggests many April buyers were existing homeowners now looking to sell their current home. “It could create a kind of virtuous cycle that could ultimately attract more first-time buyers this year,” he said.
Those who ventured into the market last month saw the seasonally adjusted average price hit $695,887, which was up 5.7% from March. The average real house price reached around $716,000 in April, down 3.9% from April 2022, but up $103,500 from January 2023.
Excluding the greater Toronto and Vancouver area markets from the calculation, the national average price is down about $144,000, CREA said.
“The improving demand environment is helping to drive up home prices, although affordability remains significantly tight,” Rishi Sondhi of TD Economics said in a note to investors. “However, moderating supply probably plays an even bigger role in driving up prices. »
Housing starts up from March
CREA’s national residential property resale activity data was released the same day Canada Mortgage and Housing Corporation released its housing starts figures, which showed that their annualized pace had risen 22% in April compared to March, fueled by an increase in multi-family housing starts in urban centres.
In seasonally adjusted and annualized data, the number of housing starts stood at 261,559 units in April, compared to 213,780 units in March, said the federal housing agency.
Housing starts in urban centers jumped 26% to 241,585 units in April, on an annualized basis, while the annualized rate of multi-unit housing starts rose 33% to 201,621 units. Single-detached housing starts fell 2% to 39,964 units, again on an annualized basis. The annualized rate of housing starts rose 36% in Vancouver, 54% in Toronto and 43% in Montreal.
Worst start to the year in Quebec
In Quebec, still in seasonally adjusted data, the number of housing starts for the month of April amounted to 29,407, an increase of 8% compared to March. But when the data is compared from one year to another, we see that 2,865 homes were started in April 2023, a decrease of 48% compared to April 2022.
This is an eighth consecutive monthly decline, notes the Association of Construction and Housing Professionals of Quebec (APCHQ).
Year after year, “residential construction in Quebec is off to its worst start to the year since 2016. The impact of rising interest rates on housing starts is unstoppable, in all market segments and in all regions. Obviously, the housing shortage can only get worse”, explains Paul Cardinal, director of the economic department of the APCHQ.