Canadian home sales post biggest decline in 16 months in October

CANADIAN home sales fell in October by the most in 16 months as higher borrowing costs continued to keep buyers on the sidelines, data from the Canadian Real Estate Association (CREA) showed on Wednesday (Nov 15).

Canadian home sales fell 5.6 per cent in October from September, the fourth straight month of declines and the biggest since June 2022. On an annual basis, without adjustment for seasonal variation, sales were up 0.9 per cent.

“We’re only in November, but it appears many would-be home buyers have already gone into hibernation,” Larry Cerqua, chair of CREA, said in a statement. “The October numbers also revealed some sellers may be shelving their plans until next spring.”

The Bank of Canada raised its benchmark interest rate to a 22-year high of 5 per cent in July to tackle inflation. Last Thursday, the central bank warned businesses and households to plan for higher borrowing costs than they have been used to in recent years.

The sales-to-new listings ratio, a key indicator of the balance between supply and demand, fell to a 10-year low of 49.5 per cent. A lower ratio favours buyers.

The industry group’s Home Price Index decreased 0.8 per cent on the month and was up 1.1 per cent annually, while the national average selling price was up 1.8 per cent on the year. REUTERS