Canadian real estate ends 2024 with chilly sales
CREA December 2024 recap
Penelope Graham, Head of Content
Demand for Canadian real estate dipped in December, ending the year on a chillier note following several months for sales throughout the autumn.
A total of 27,643 properties sold over the course of December, reports the Canadian Real Estate Association (CREA), marking a 5.8% decrease from November. However, on an annual basis, the market continues to recover, with sales up 19.2% compared to the same time period in 2023.
The decline in activity, in addition to the typical holiday-induced pause, was due “much of the early fall surge of supply having now been picked over”, according to CREA.
“The number of homes sold across Canada declined in December compared to a stronger October and November, although that was likely more of a supply story than a demand story,” said Shaun Cathcart, CREA’s Senior Economist. “Our forecast continues to be for a significant unleashing of demand in the spring of 2025, with the expected bottom for interest rates coinciding with sellers listing properties for sale in big numbers once the snow melts.”
Also read: November home buying conditions improved due to lower rates
CREA also points out the impact recent interest rate cuts have had on buyer demand, with sales now 13% above where they were in May – just before the Bank of Canada started lowering its benchmark rate in June.
From a quarterly perspective, sales are up 10% from the time period between July and September, and “stood among the stronger quarters for activity in the last 20 years, not accounting for the pandemic,” states CREA’s release.
Home prices remain roughly flat on year and monthly basis
Tepid sales put little pressure on home price growth, with the national average rising just 2.5% year over year to $676,640. Compared to November, that has actually softened by -2.2%. The MLS Home Price Index, however – which measures the most typical home type sold, with the upper and lower extremes stripped out – came in at 0.3% MoM, and dipped by 0.2% annually. That’s the smallest decline seen in the index since last April, indicating that prices are firming up.
New listings are starting to dry up
While the market remains generally well supplied compared to last year – there were 128,000 properties listed for sale by the end of 2024, up 7.8% from 2023, and 10.4% higher than December of last year – the number of new listings has started to dwindle. A total of 29,128 were brought to market in December, down -1.7% from November. Overall, real estate supply is below the long-term average of 150,000 listings.
The total number of months of inventory – the amount of time it would take to fully sell off all available homes for sale – came in at 3.9. That’s higher than the 15-month low recorded in November, but remains tight; according to CREA, a seller’s market would be below 3.6 months and a buyer’s market would be above 6.5 months, positioning the current national balance of supply and demand close to seller’s market territory.
The sales-to-new-listings ratio (SNLR) – a metric that gauges the level of competition within the marketplace, came in at 56.9%, still within balanced territory.
“While housing market activity may take a breather over the winter with fewer properties for sale, the fall market rebound serves as a good preview of what could happen this spring,” said James Mabey, CREA Chair. “Spring in real estate always comes earlier than both sellers and buyers anticipate. The outlook is for buyers to start coming off the sidelines in big numbers in just a few months from now, so if you’re looking to buy or sell a property in 2025, contact a REALTOR® in your area and start getting ready today.”
CREA releases updated forecast for 2025 housing market
The national association has released some fresh numbers for what’s in store this year and next for both buyers and sellers.
“CREA’s latest forecast is little changed from the fall 2024 outlook. The assumption remains that the combination of two and a half years of pent-up demand and lower borrowing costs, together with the usual burst of spring listings will lead to a rebound in market activity across the country in 2025. There was a good preview of what that might look like during the fourth quarter of 2024,” states the association’s release.
Also read: Ratehub.ca’s 2025 mortgage predictions
While home buyers received some considerable rate relief in the form of Bank of Canada cuts throughout the second half of 2024, further cuts are expected to taper off this year. That could further incentivize buyers who’ve been waiting for the right time to take out a mortgage, says CREA, particularly those who’ve been debating taking out a fixed or a variable rate.
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Buyer demand is expected to differ across Canada; British Columbia and Ontario are expected to see sales bounce back to a larger degree, due to currently lower sales, higher levels of supply, and less room for rising prices, as they’re already among the most expensive parts of the country.
“By contrast,” writes CREA, “increased demand is expected to play out more on the price side in Alberta and Saskatchewan where sales were already near record levels in 2024, inventories are currently near-20-year lows, and prices are still relatively more affordable.”
Overall, CREA expects about 532,704 residential properties to be sold in 2025, marking an 8.6% increase from 2024. “This represents an upward revision to the previous forecast for a 6.6% increase, based primarily on the surprising strength of markets across most of Canada in the fourth quarter of last year,” CREA adds. This is set to rise by an additional 4.5% to 556,662 transactions in 2026.
The national average home price, meanwhile, is set to rise by 4.7% year over year to $722,221 in 2025, little changed from the 4.4% gain forecast last October, before increasing by another 3.3% to $746,379 in 2026.
“Outside of British Columbia and Ontario, these kinds of price gains and some even larger ones are already well underway,” CREA states.
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Penelope Graham, Head of Content
Penelope has over a decade of experience covering real estate, mortgage, and personal finance topics and her commentary on the housing market is featured on both national and local media outlets.