Housing market rebound could be ahead despite slower December

The national market cooled to round out 2024, but CREA says better times may be in store

Housing market rebound could be ahead despite slower December

The pace of home sales across Canada cooled between November and December, although the fourth quarter’s overall performance suggested the housing market could be set to bounce back in 2025.

That’s according to the Canadian Real Estate Association (CREA), whose housing data for last month showed sales slid by 5.8% compared with November – but remain well above the pace set in May, the last month before the Bank of Canada began to slash interest rates last year.

Overall, Q4 saw sales activity jump 10% over the previous quarter, a trend that CREA senior economist Shaun Cathcart said indicated a potentially strong spring housing market was in store.

The number of newly listed properties on the market fell by 1.7% last month over December, while home prices were largely unchanged. The MLS Home Price Index (HPI) increased by 0.3% month over month and inched 0.2% lower compared with the same month in 2023.

Cathcart said the drop in sales was “likely more of a supply story than a demand story” and pointed to the likelihood of lower interest rates down the line as a potential catalyst for a busier market in the months ahead.

“Our forecast continues to be for a significant unleashing of demand in the spring of 2025,” Cathcart said in remarks accompanying CREA’s release, “with the expected bottom for interest rates coinciding with sellers listing properties for sale in big numbers once the snow melts.”

While odds of a Bank of Canada rate cut in January have slid following stronger-than-expected job figures for December, the central bank is widely expected to continue moving rates lower throughout the year.

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