Brendan Eby

On a seasonally adjusted basis, home sales decreased 3.0% from December to January, a second monthly decline in three months. As a result, sales slipped to their lowest level since August 2010 (excluding the pandemic). As the Bank of Canada raised its policy rate in January and is expected to keep monetary conditions restrictive for most of 2023, the resale market could experience further declines in the months ahead and remain at a level of activity well below its historical overage. Adding to the weakness of the report, the decrease in sales was widespread across provinces, with only Ontario (+0.4%) and PEI (+6.0%) registering increases. On the supply side, new listings were up 3.3% in the month, a first increase in three months and the fastest one since February 2022. Still, we continue to see that there is a high proportion of sellers who are changing their minds, as we estimate that about one in five listings are withdrawn during the month. Despite this, the increase in listings combined to the low level of sales is allowing supply to rise in Canada as testified by the number of months of inventory increasing from 4.1 to 4.3 in January. This is up from the trough of 1.7 reached in the pandemic but remains low on a historical basis. As a result, the active-listing to sales ratio is easing but is still tighter than its historical average in the majority of Canadian provinces, with only B.C. and Manitoba indicating a ratio above average. On a year-over-year basis, home sales were down 39.4% compared to the second-strongest month of January in history last year. Sales were down in every province on a year-over- year basis, with the largest decline observed in B.C. (-49.0%) and the smallest in Newfoundland (-13.5%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-canada.pdf