Canadian Existing-Home Sales Decline 5.8% in December

On Wednesday, the Canadian Real Estate Association (CREA) reported that existing-home sales activity recorded over Canadian MLS® Systems declined in December, following two consecutive monthly increases. According to CREA, sales were down 5.8% compared to November but remained 13.0% above May, just before the first interest rate cut by the Bank of Canada in early June.

CREA also reported that sales rose 10% in Q4 compared to Q3, making it one of the strongest quarters for activity in the past 20 years, excluding the pandemic period.

In December, new listings fell 1.7%, marking three straight monthly declines after a spike in supply in September. With sales decreasing more than new listings on a month-over-month basis, the national sales-to-new listings ratio declined to 56.9%, down from a 17-month high of 59.3% in November. The long-term average for this ratio is 55%, with readings between 45% and 65% typically indicating balanced housing market conditions, CREA noted.

There were 128,000 properties listed for sale on all Canadian MLS® Systems at the end of 2024, up 7.8% from a year earlier but still below the long-term average of around 150,000 listings.

There were 3.9 months of inventory on a national basis at the end of the year, up from a 15-month low of 3.6 months at the end of November but still well below the long-term average of five months. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months and a buyer’s market would be above 6.5 months, according to CREA. That means the current balance of supply and demand nationally is still close to seller’s market territory.

The National Composite MLS® Home Price Index (HPI) rose 0.3% month-over-month in December—the second straight increase.

The non-seasonally adjusted National Composite MLS® HPI stood just 0.2% below December 2023, the smallest decline since prices dipped into negative year-over-year territory last April. The non-seasonally adjusted national average home price was $676,640 in December 2024, up 2.5% from December 2023.