With the spring housing market heating up in the lower mainland a trend of general market increase/growth has solidified over the last three to four months.
When January 31 2023 rolled around and statistics for the month came in...there were signs for hope. Nonetheless everyone remained wary. Once month of growth is not enough to mark the beginning of a new trend, and surely not enough to instill confidence in buyers. Looking back now as we cross the midway point of May it is safe to declare that the market, in general, has been trending upwards for the last three to four months.
But what does that really mean? And where is the market headed?
We've brought together key information from several reliable sources to help inform you on the market’s twists and turns...and maybe shed a bit of light on what is coming next.
Royal Bank of Canada outlined five key points summarizing the first four months of 2023 Canadian wide market:
- Spring 2023 is likely the turnaround point for the market.
- April home resales jumped 11.3% month over month nationwide—this was the strongest monthly advance in almost three full years.
- Prices increased in back-to-back months, including the MLS Home Price Index inching up 1.6% month over month in April.
- Demand vs. supply conditions now appear to be tight: sellers are back in the driver’s seat.
- Heat is returning to the market faster than economists anticipated: prices could well extend April’s gains.
On May 15th the Financial Post reported that since January the average price of a Canadian home has increased over $100,000:
The average price of a home sold in Canada jumped 4.3 per cent in April and is now up nearly 17 per cent since January as the country’s real estate market continued to show signs of a rebound, according to figures from the Canadian Real Estate Association.
The April housing data, released May 15, showed the month-over-month gain from March brought average non-adjusted price to $716,000, up more than $100,000 from January but still 3.9 per cent below the level of April 2022. The MLS Price Index is also up a more modest five per cent from January.
Sales, meanwhile, jumped 11.3 per cent for the month while new listings only edged up by 1.6 per cent, leaving new supply at a 20-year low, CREA’s report said.
Meanwhile Global News was following a different thread and asked the question; buyers have returned to Canada's housing market, when will sellers?
CREA senior economist Shaun Cathcart did note that the first week of May has seen a “burst of new supply,” suggesting some of those who bought last month might now be listing their properties.
“This is a buy-first market, and once you’ve secured something that is more suitable for you than what you already have, then you put yours up for sale,” he tells Global News.
Cathcart says that those trying to enter the market should be encouraged by signs of more buying activity these past few months, because existing homeowners are going to have to vacate their properties before the entry-level homes they’re living in come back onto the market.
“This can keep the market churning and keep people moving around … and ultimately free up some supply at some point for first-time buyers,” he says.
“I think that’s what we saw the start of in April.”
Whether first-time buyers can afford to break into that market is another question, as higher borrowing costs come up against housing prices that are starting to climb again.
Read more of what Global News has to say here
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