The Canadian Real Estate Association says the number of homes sold in October rose 30 per cent compared with a year ago, marking a shift from the market’s holding pattern.
On a seasonally adjusted month-over-month basis, national home sales rose 7.7 per cent from September, as 44,041 residential properties changed hands last month across Canada.
The association said rising home sales activity was broad based, with the Greater Toronto Area and British Columbia’s Lower Mainland recording double-digit increases in October.
CREA senior economist Shaun Cathcart called the jump in sales a “surprise,” even as the Bank of Canada continues to lower its key interest rate.
The central bank has lowered its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
Jason Ralph, broker of record for Royal LePage Team Realty in Ottawa, said activity often picks up in the fall, but surpassed his expectations last month.
Still, he said the market rebound seems to be happening gradually, rather than all at once. He attributed that trend to the Bank of Canada’s messaging surrounding its rate cut cycle.
“There’s not going to be this massive rush to the market like we saw in the pandemic. That was an anomaly,” said Ralph.
“The 50-basis-point drop was enough to push some people on the sidelines into the market where they found it enticing enough to jump in, but it wasn’t that massive wave that everybody’s waiting on because the messaging is, ‘We’re lowering it and we’re likely going to lower it again.'”
Cathcart said the sales increase last month was more likely related to the surge in new listings that hit the market in September. That month saw a 4.8 per cent increase in new homes on the market, pushing supply to some of the highest levels seen since mid-2022.
“There probably won’t be another rush of new supply like that until next spring, and at that point, mortgage rates should be close to their expected lows, as well,” said Cathcart in a press release.
“With that in mind, you can think of the October numbers as a sort of preview for what we might expect to see next year.”
CREA chair James Mabey added that October’s strong sales numbers “suggest buyers have been in the market since rates began to fall in early summer, but they were waiting for the right property to come up for sale, which didn’t happen in a big way until September.”