Canadian Home Sales Reach Highest Level Since April 2022

Now, we can expect 3.7 months of inventory on a national basis, down from 4.1 months at the end of September

After Toronto and Vancouver real estate boards posted striking year-over-year increases in home sales for October — 44% and over 30%, respectively — it appears they're not alone, as the Canadian Real Estate Organization (CREA) reported Friday that nationwide sales in October were the highest they've been since April 2022.

All in all, sales rose 7.7% on a month-over-month basis and a grew a substantial 30% from October 2023, on a not-seasonally-adjusted basis. In comparison, sales only rose 1.9% month-over-month in September and 1.3% in August, representing a potential breaking of the 'holding pattern' that has characterized the last several months, despite consecutive rate cuts.

After 'surging' by 4.8% in September to 185,427, new listings fell 3.5% month over month in October to 174,458 active listings, representing an 11.4% increase from last year. The dip was led by a drop in supply in the GTA, but thanks to the September growth, new supply remains at some of the highest levels since mid-2022, according to CREA.

As a result, we saw a tightening of the sales-to-new listings ratio in October to 58%, up from 52% in September, with sales rising and listings falling. For reference, balanced housing market conditions typically experience a ratio between 45% and 65%. Currently, the long-term average is 55%.

Now, we can expect 3.7 months of inventory on a national basis, down from 4.1 months at the end of September and the lowest level in more than a year, skewing us slightly closer to a sellers' market, which begins when inventory gets below about 3.6 months.