According to the Canadian Real Estate Association (CREA), Canadian home sales and average prices moved higher in November. This was the fourth straight month sales have increased amid interest-rate cuts from the Bank of Canada (BoC), which has lowered mortgage costs. CREA believes that the 50-basis-point rate cuts from the BoC over its last two meetings could raise market activity over the winter months.

• Sales of existing homes in Canada rose by 2.8% in November over the previous month. While down from the 7.7% gain in October, it was the fourth straight increase, suggesting demand for real estate is picking up amid lower borrowing costs. The number of homes for sale was up 8.9% in November over the same month last year.
• With the market beginning to tighten, according to CREA, the average price of a home across Canada increased by 0.9%.
• Real estate announcements didn’t end there yesterday. The Canada Mortgage and Housing Corporation announced that housing starts increased by 8.4% in November over October. Housing starts have been a key indicator as the government seeks to increase the supply of homes to help balance the market and ease affordability concerns.
• While activity in the real estate market has moved higher, Canadian consumers hold some uncertainty towards real estate. The latest consumer confidence reading from Bloomberg Nanos showed fewer Canadians believe the value of real estate will strengthen in the next six months.

The BoC has signalled its intentions to keep lowering interest rates in 2025, which should put downward pressure on mortgage rates, potentially bringing more buyers into the market. Still, slower labour market conditions and weaker consumer confidence could weigh on market activity. The real estate market is one of the areas the BoC has been monitoring to help gauge consumer strength.

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