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Home Price Growth & Competitive Housing Market Continue


Under Market Updates

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March 28th, 2022

Despite a sharp uptake in new listings, buyers will continue facing strong competition if they’re looking to buy in today’s market, according to the latest numbers from the Canadian Real Estate Association (CREA).

In their February 2022 release, CREA reports that new listings increased by 23.7% month-over-month. While the increase in available properties is welcome to worn out buyers, the sales-to-new-listings ratio (SNLR) remains high at 75.3%. This is the ratio that compares the number of sales in a given time to the number of new listings becoming available. A market that favours sellers is usually above 60%. February saw an improvement over the historically low SNLR of 89.4% in January 2022. For reference, the long term average of this metric is 55.1%.

Property sales rose by 4.6% over last month. While encouraging, this means properties are still available to snap up. The increase in activity is likely a result of the rebound in new listings following the 10.8% decline in January. Additionally, this strong activity may continue as listings that came on to the market in late February continue to sell into March.

Despite this renewed activity, the SNLR does mean that market conditions still greatly favour sellers. The historically low levels of stock have carried over from last month despite the bounce in new listings, still sitting at 1.6 months of inventory, tied with January 2022 and December of last year for the lowest levels ever recorded.

The continued competitive market means the National Home Price Index Benchmark Price broke a further record this month, up 3.5% month over month and 29.2% year over year in February, bringing the average price of a home to $868,400. The actual (not seasonally adjusted) national average sale price posted a 20.6% year-over-year gain in February.

The Future is Still Competitive, but There is Room for Optimism

The bounce in new supply follows a similar trend to the previous two years. The seller’s market is expected to hang around for the near future, but there is optimism that new listing numbers will continue to rapidly improve. CREA’s senior economist, Shaun Cathcart, says :

“In the short term, expect at least one more month of stronger sales as the majority of those new listings came onto the market near the end of the month so many of the associated sales likely won’t happen until early March. Ideally, listings will continue to come out in big numbers in the months ahead. Combined with higher interest rates and higher prices, we could be at a turning point where price growth begins to slow down and inventories finally begin to recover after seven years of declines. Still, in order to turn this market back towards balance long-term, building more new homes across the spectrum remains the key.”

2022 Competitive Market Continues as Buyers Scoop Up Influx of New Listings by Daniel Crook | zoocasa

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