Canadian housing market is off to a cold start in 2023

Canada Real Estate Association Chair
(Jill Oudil, Chair of CREA)

January was the worst month for home sales in Canada since 2009, statistics released by the Canadian Real Estate Association (CREA) show.

Home sales edged back down 3% between December 2022 and January 2023, giving back all of December’s small gains and rejoining the mild downward trend observed since last summer.

The actual (not seasonally adjusted) number of transactions in January 2023 came in 37.1% below the second-best January ever in 2022. The January 2023 sales figure was the lowest for that month since 2009, according to CREA.

“The big question on everyone’s minds after last year was what will housing markets do in 2023?” said Jill Oudil, Chair of CREA. “We may have to wait another month or two to see what buyers are planning this year since new listings are currently trickling out at near-record low levels, but that should change as the weather warms,” continued Oudil.

“Early 2023 feels a lot like 2019, where after a year in which it became much harder to qualify for a mortgage, everyone was wondering if the market would pick up in the spring,” said Shaun Cathcart, CREA’s Senior Economist. “In 2019 the market started off slow, as there wasn’t much to buy. It took off once spring listings started to come out. With the Bank of Canada increasingly signaling that rates are now at the top, it’s possible the spring market this year could also surprise, particularly in areas where prices have been stable or are now stabilizing. Buyers are likely feeling increasingly confident in taking on variable rate mortgages, and 2023 will probably be a good window of opportunity to be able to engage in a calmer home search and buying experience following the intense market conditions of the last few years.”

The actual (not seasonally adjusted) national average home price was $612,204 in January 2023, down 18.3% from the same month last year. The national average price is heavily influenced by sales in Greater Vancouver and the Greater Toronto Area, two of Canada’s most active and expensive housing markets. Excluding these two markets from the calculation cuts almost $113,000 from the national average price.