Canadian home sales drop in December 2022 by 39 per cent compared to previous year: CREA

Findings released by the Canadian Real Estate Association (CREA) on Monday show that compared to December 2021, the number of homes sold in Canada dropped by 39 per cent.

The amount they sold for also took a 12 per cent dip during the same period.

The CREA cited spiking interest rates as the main reason. Industry experts are preaching patience.

“Save your pennies and maybe wait for a better interest rate,” says Shaun Cathcart, a senior economist with the CREA.

Cathcart says, given the current the state of the market with high borrowing costs and low inventory, now might not be the best time to look for a home.

“It’s going to be difficult for first time homebuyers to buy into this market this year because prices haven’t come down as much as they may and the biggest piece is that interest rates haven’t come down,” he says.

“Right now it feels a lot like 2019,” says Danielle Johnson, an agent based in Dieppe, N.B.

That’s when the real estate market was more balanced.  There’s also the lack of urgency that many were feeling during the pandemic, meaning selling strategies have changed.

“Listing properties at the fair market value, which means not what your neighbour sold for in 2020 but more what your neighbours listed at and you should still be able to list it at that price and get a good offer. Gouging is not working right now,” says Johnson.

Johnson says, while the market has levelled out, sellers are still in the driver’s seat as long as they can be patient.

“They missed the boat on the multiple offers, so they’re missing out on the gravy, the surplus, so you can still get a good offer. Your property hasn’t gone down in value 20 per cent, not at all. It’s just that you can’t anticipate to get over and above asking because people are not fighting over that property. People have buyers fatigue, they don’t want to play that game anymore,” Johnson says.

The CREA is forecasting sales to drop another six per cent in 2023 but are expecting some recovery in 2024.