National sales and new listings were stifled in March, as home buyers and sellers across the country remained on the sidelines in the second half of the month in reaction to healthcare and economic measures to combat COVID-19.

Although sales crept up 7.8% year-over-year (y-o-y), there was a stark decline in sales compared to February of this year, when the market was gearing up for a busy spring season. Compared to last month, home sales fell 14.3% nationally, with declines experienced across major markets across the country. The Greater Toronto Area (GTA) saw the largest month-over-month (m-o-m) decline of 20.3%, followed by Montreal (-13.3%) and the Greater Vancouver Area (-2.9%).

National home prices grew 12.5% to $541,926. Excluding the GTA and Greater Vancouver, this figure drops nearly $130,000. The Home Price Index, which reflects the value of homes sold grew slightly m-o-m by 0.8%, and 6.9% y-o-y.

COVID-19 Impact Reflected in Second Half of March

While there was an overall increase in y-o-y sales, CREA’s senior economist, Shaun Cathcart noted that “numbers for March 2020 are a reflection of two very different realities, with most of the stronger sales and price growth recorded during the pre-COVID-19 reality which we are no longer in.” CREA notes that data for the second half of March considered in tandem with preliminary figures for April paint a different, more realistic picture of the current state of the market as illustrated by early April numbers trending at about “half of what would be normal for that time of year.” As such, although we can begin to see some shifts, the full impact of COVID-19 on Canada’s housing market will be more apparent in the coming weeks.

As more buyers and sellers reconsidered entering the market over the course of March, new listings reflected a similar downward trend to sales, with a 12.5% drop since February 2020. As such, the 12-month moving average sales-to-new-listings ratio (SNLR), which is a measure of buyer competition, inched back to 62.1% from 54.6% last year. For reference, a range between 40% – 60% indicates balanced conditions, while below and above that threshold indicate local housing market conditions favouring buyers and sellers, respectively.

Given the magnitude and impact of COVID-19 response measures across the country, Canada’s national housing market remains relatively stable in the immediate term, with CREA stating that “this measure of market balance was remarkably little changed“ compared to February. They report that two thirds of markets remained in balanced territory over March, with the remainder exhibiting sellers’ market conditions.

Months of inventory – a measure of the time it would take to liquidate available market supply at the current rate of sales activity – is sitting at 4.3 months nationally, which is half a per cent higher than February, but still nearly a full percentage point lower than the long term average of 5.2 months. As noted earlier, this can be attributed to the steep drop in sales and new listing activity in the latter half of March.

Home Prices Continue to Trend Over Regional Lines

The ongoing regional trend in home price activity continues across the country, with Ontario experiencing a 14.7% annual increase in average home prices to $682,779 and British Columbia also experiencing an uptick in average price growth of 14.9% y-o-y to $788,425.

The average price in the GTA rose 14.5% y-o-y to $902,680 although the rate of growth was slower compared when compared to February, when average prices grew 16.6% y-o-y. Further East, Ottawa average home prices continued on an upward trajectory last month, rising 18,3% annually to $516,276. Montreal followed suit, with a 10.4% annual increase in average prices to $433,750.

In Western Canada, Vancouver average home prices sit at $1,080,193, up nearly 10% y-o-y. In the Prairies, both Edmonton and Calgary experienced annual average price declines at 4.7% and 3.4% respectively.

Learn more about how home prices performed in markets across Canada in March in our infographic below :

CREA : National Home Sales and Listings Drop Sharply in March by zoocasa