Between August and September 2022, Canadian MLS® Systems recorded a 3.9% fall in house sales. From May through August, monthly declines have been progressively less severe. The current drop in sales, which began in March when the Bank of Canada raised interest rates for the first time, got a little worse in September.
Greater Vancouver, Calgary, the Greater Toronto Area (GTA), and Montreal were among the local regions that had sales declines between August and September, dragging down the national average. The actual (not seasonally adjusted) number of transactions in September 2022 was 32.2% less than in the same month in 2021 and around 12% less than the 10-year average for that month prior to the pandemic. In September, there were 0.8% fewer newly listed homes compared to the previous month. This followed declines of 6.1% and 4.9% in July and August, respectively, as some sellers seemed content to stay dormant until a greater number of purchasers were willing to return to the market. The Greater Toronto Area and the Lower Mainland of British Columbia had the greatest declines and increases in fresh supply, respectively, in September.
As a consequence of a reduction in sales and a minimal change in the number of new listings, the ratio of sales to new listings declined to 52% in September from 53.8% in August. In September 2022, the national sales-to-new listings ratio reverted to its June and July levels and was just somewhat below the long-term average of 55.1%. At the end of September 2022, there were 3.7 months of national inventories, up from 3.5 months at the end of August. Even if the number of months of inventories is still far below the long-term average of around five months, it has recovered significantly from the all-time low of 1.7 months achieved at the beginning of 2022.
The Aggregate Composite MLS® HPI declined by 1.4% month-over-month in September 2022, which is not a trivial decline historically, but is smaller than the declines in June, July, and August 2022. Regionally, Ontario and, to a lesser extent, British Columbia have seen the bulk of recent monthly losses. In August and September, the most striking trend was the cessation of monthly price declines in a number of Ontario regions, notably in the Greater Golden Horseshoe. Some markets even saw price hikes from August to September. Edmonton and Winnipeg have prices that are somewhat below their peaks, whilst Calgary, Regina, and Saskatoon have prices that are stable. In Quebec, Montreal prices have declined while Quebec City costs have remained virtually steady.
On the East Coast, price weakness that had been confined to the Halifax-Dartmouth region seems to be extending to New Brunswick and Newfoundland and Labrador, while prices on Prince Edward Island have levelled out but have not yet decreased. In September, the Aggregate Composite MLS® HPI was up 3.3% year-over-year, which is a far cry from the near-30% year-over-year gains recorded in early 2022. Year-over-year MLS® HPI comparisons are expected to begin mildly negative in the final months of this year, with declines becoming more noticeable in the spring of 2019 – one year after the peak.
The actual (not seasonally adjusted) national average home price was $640,479 in September 2022, 6.6% less than in September 2021. The Greater Vancouver and the Greater Toronto Area, two of the most active and expensive housing markets in Canada, have a substantial effect on the national average price. Excluding these two regions from the calculation decreases the national average price by around $117,000.