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Canadian home sales dipped by 5.8% in December 2024 compared to the previous month, following a supply surge in October and November. However, sales remained 13% higher than pre-rate cut levels in May, and home prices rose by 0.3% month-over-month. Despite this dip, the fourth quarter was one of the strongest in the last two decades, and experts forecast that demand will surge again in spring 2025, aided by lower interest rates and a substantial increase in property listings.

Inventory levels decreased as listings fell by 1.7% from November to December, reflecting a continued supply shortage. This trend led to a sellers' market with only 3.9 months of inventory, far below the typical five-month average. However, the sales-to-listings ratio remained close to the long-term balanced market ratio of 55%. The average home price for December was $676,640, reflecting a modest year-over-year increase.

Looking ahead, CREA predicts an 8.6% rise in home sales for 2025, driven by pent-up demand and lower mortgage rates. Home prices are expected to rise by 4.7% to $722,221. The forecast assumes economic stability but acknowledges the potential risks of trade disruptions, which could affect the market. Further growth is anticipated in 2026, with a projected 4.5% increase in sales and a 3.3% rise in prices.

Read the full article on: STOREYS