Canada: Home sales feel the November chill

Existing homes sales fell 3.3% in November on a seasonally-adjusted basis, undoing all of October’s modest advance and resuming the downward trend since February. Sales were 39% below the year-ago level. Sales contracted in around 60% of Canadian markets in November. Meanwhile, the average sale price of an existing home (not seasonally adjusted) fell to $633K in November –down 12% from the November 2021 level.

The Bank of Canada is no doubt looking at the November housing data with some relief. Having been clear that home prices still need to fall further, this was the outcome that the Bank was hoping for. But there is still a way to go before they will be satisfied. Having raised rates by 50bps last week, it will take time for this latest move to be fully reflected in the housing market and the broader economy.  As such, there is no relief coming soon. It’s going to be a tough winter for Canadian homeowners.