Verico Equity Plus Mortgages Inc.
Scotiabank: Canadian Home Sales (January 2025): Housing News Flash
2/19/2025
Canada Housing Market: Trade uncertainty weighed on housing markets in January ... and this is likely to continue in the foreseeable future
National housing market conditions eased significantly in January 2025 with sales declining and new listings posting a near-record monthly rise. The national MLS House Price Index stayed essentially unchanged in January.
Both declining sales and sharply rising new listings contributed to cool housing resales conditions nationally from December 2024 to January 2025. Over this period sales declined -3.3%, following a -5% decline from November to December. In January 2025, sales were only 2.9% above their level in the same month of 2024. But from the CREA report, the sales decline in January came mostly from a weak performance in its last week, the period where uncertainty on the new U.S. administration tariff policy started flying high.
New listings climbed 11% from December to January and their level was at an historical high, excluding the very volatile initial 12-month period of the pandemic. In terms of their monthly progression, new listings posted the second largest historical increase in January (again outside the above-mentioned pandemic period), after the one observed in February 2022 (+21.4%) when house prices were at their historical summit and just before the Bank of Canada and other central banks started hiking their policy rate. This monetary policy tightening led to the subsequent cooling in Canada’s economic and housing market conditions and house prices declining.
With sales declining and new listings rising, the national sales-to-new listings ratio cooled further and significantly from December to January, declining from 56.5% to 49.3% over this period. This indicator of market pressures is now below the mid-point of our estimated balanced conditions zone (of between 44.7% to 66.1%). Another indicator of national market pressures, months of inventory, also eased from December to January, increasing from 3.9 to 4.2 months over this period nationally, but was still below its long-term pre-pandemic average of 5.2 months. All provinces witnessed an increase in their months of inventory from December to January, except for Saskatchewan where it was unchanged and for Newfoundland and Labrador where it declined (from 5.5 to 4.3 months).
