Canada: Home Sales End 2022 on a High Note

Existing homes sales advanced 1.3% in December on a seasonally-adjusted basis, the second increase in the past three months. Meanwhile, the average sale price of an existing home fell by 0.3% to $636K in December – the fourth consecutively monthly contraction and the ninth decline in the past ten months. The number of new listings fell 6.4% in December, for the largest monthly decline since January 2022. When paired with the rise in sales, the sales-to-new listings ratio advanced to 54.4%, remaining in what’s considered to be balanced territory. The strength of December’s home sales data helped to offset weakness in real manufacturing and construction data for November also released today. This left our tracking for Q4 real GDP growth at 1.3% (q/q, saar). This projected advance in real GDP is still well above the 0.5% projected by the Bank of Canada in its October 2022 Monetary Policy Report. As such, today’s print helps to reinforce our view that the Bank has one more 25 basis point hike left to go at its upcoming meeting.