Canadian Existing Home Sales (December 2024)

Canadian home sales end 2024 on a soft note 

• Canadian existing home sales dropped 5.8% month-on-month (m/m) in December, but were 13% above May's level, just before the Bank of Canada began cutting rates. 
• Canadian new listings dipped 1.7% m/m in December. With sales dropping more than listings, the sales-to-new listings ratio eased about 2.5 percentage points to 56.9% - slightly above its long-run average and pointing to balanced housing market conditions nation-wide. There were 128k properties listed for sale in December, up 8% from a year earlier.
• These balanced conditions supported price growth last month, with the MLS home price index (HPI), rising 0.3% m/m. However, in year-on-year terms, price growth remained subdued, with the HPI down 0.2% year-on-year and the Canadian average home price up a modest 2.5% on that same basis.  

Key Implications

• Despite a loosening in federal mortgage rules, December was a subdued month in terms of activity. However, December is a low volume sales month, so some caution is warranted in drawing too many conclusions. Markets in Ontario and B.C. likely still have significant pent-up demand and a relatively high share of homes that fall into the price category that will benefit from federal mortgage rule changes ($1-1.5 million). Additionally, even with bond yields grinding higher since September, they're still below levels seen a year-ago. 
• Our baseline expects a solid gain in Canadian home sales and average home prices this year, although the macro backdrop remains highly uncertain due to tariff threats. 

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