Canada’s realtors are hinting that home prices may have found their bottom.

The February numbers from the Canadian Real Estate Association show price, as measured by the Aggregate Composite MLS Home Price Index (seasonally adjusted), was flat compared to January.  That ends a five month slide in prices, which dropped 1.3% between December and January.

The national average price of a home in February came in at a little less than $686,000, up 3.5% year-over-year.

Sales were up almost 20% from last February, but it has to be remembered that February 2023 was an unusually slow month.  Compared to January sales dipped 3.1% in February.

CREA is hopeful the stabilization of prices signals an impending reversal in demand.

“The fact that prices were unchanged from January to February was noteworthy given the … drop from December to January.  Shifts this abrupt are exceedingly rare.  There have only been three other times in the last 20 years that have shared a sudden improvement or increase in the month-over-month percentage change … of this size; all at various points in the last four years when demand was coming off the sidelines,” CREA said in its release.

New listings rose 1.6% in February compared to January, bringing the sales-to-new listings ratio to 55.6%. The long-term average is 55%.

Published by First National Financial LP

Some good news from Statistics Canada.  Canadian households were wealthier in the 4th quarter of 2023.

The federal number-crunchers say household net worth rose by 1.8%, largely because of stronger financial markets.  Both bonds and stocks rallied from slumps experienced in the third quarter.  Net worth is the value of all household assets, minus all liabilities.

Over the year as a whole, 2023 saw household financial assets increase by 7.0%, with non-financial assets rising 1.8%.  Financial liabilities also increased, climbing 3.4%.  That is the slowest accumulation of household debt in a calendar year since 1990.

The household saving rate was up.  It came in at 6.2% in Q4 of 2023 compared to 5.6% for the same period a year earlier.

Canada’s hefty debt-to-income ratio eased slightly in the 4th quarter, dipping to 178.7% from 179.2% in Q3.  So, Canadian households still owe about $1.79 in debt for every dollar of disposable income.

Residential real estate has been holding its own, although the market has been inconsistent.  The value of residential real estate declined 1.9% in Q4, the second drop in a row.  However, for the entirety of 2023 value increased by 1.8%, due to stronger performance in the first half of the year.

Published by First National Financial LP