Analyzing Canada Housing Market May 2023

Canada's housing market continues to captivate buyers and investors alike, offering a range of opportunities and challenges. This blog will delve into the insightful report provided by WOWA, an authoritative source on the Canadian real estate landscape and the respective real estate boards and associations. By analyzing the data presented in the report, you can get an insight into a comprehensive understanding of the current state of Canada's housing market and its implications for homebuyers, sellers, and investors.

1.Overview of the Canadian Housing Market

The Canadian housing market is experiencing a solid recovery, with home prices rising across most of the country. In May 2023, the average home price in Canada reached $729,044, marking a 2% increase from the previous month and the highest level since April 2022. Ontario, known for its vibrant real estate market, including cities like Mississauga, offers a variety of homes for sale. The real estate board and association provide valuable insights into the local market dynamics, making it easier for potential buyers to find homes for sale in Ontario.

This upward trend in home prices has brought the average home price in Canada higher than the levels seen at the same time last year. After facing the negative impact of rising interest rates over the past year, the Canadian housing market is finally showing a positive year-over-year increase of 2%. The rate hikes by the Bank of Canada have tempered housing demand, but with the rate hikes slowing down, and expecting the market to stabilize.

2.Transactions in May

The number of transactions in May 2023 reached 54,241, representing a 1% increase compared to last year. It also reflects a 23% increase from the previous month, indicating that sellers are becoming more active and homebuyers are entering the market. With various new bungalow developments in Ontario, buyers have options to explore that suit their preferences and budget.

3.Average Home Price Canada

The MLS Benchmark Price, which measures the price of a "typical" home in Canada, rose to $754,700 in May 2023, marking a 1% increase from the previous month. It is the fourth consecutive month that the benchmark price has increased, showing positive momentum in the market. We expect the recent rate hike in June 2023 to slow down or halt in the latter half of the year, making it an opportune time to search for Canadian homes for sale.

4.Average Sold Price

The average sold price of homes in Canada reached $729,044 in May 2023, marking a 2% increase from the previous month and reaching the highest level since April 2022. This upward trend reflects the ongoing strength of the Canadian housing market and the continued demand for residential properties. Buyers searching for houses for sale in Mississauga or other cities in Ontario can find options that align with their desired price range and preferences.

5.Regional Variations

When considering regional variations, it is notable that British Columbia maintains its position as the province with the highest average home price in the country. In May 2023, the average home price in British Columbia stood at $1,019,145, demonstrating a significant premium compared to other provinces. Ontario, including cities like Mississauga, closely follows with an average price of $928,897, indicating the continued popularity of housing in this region. Other provinces, such as Quebec, Alberta, Nova Scotia, and Manitoba, also experienced variations in average home prices, reflecting the unique dynamics and local market conditions in each area. These regions' respective real estate boards and associations can provide detailed insights into homes for sale and market trends.

6.Mortgage Rates

Regarding mortgage rates, potential buyers must stay informed about the current rates various lenders offer. Canada's best 5-year fixed rates range from 4.79% to 6.29%. These rates may change depending on individual circumstances and the specific lender. For those interested in purchasing bungalows for sale in Ontario or any other region in Canada, it is essential to explore different mortgage options and compare offerings from multiple lenders to secure the most favorable rates and terms.

7.Market Activity

May 2023 witnessed a 1% increase in housing sales compared to the previous year, totaling 54,241 transactions. This significant 23% surge in sales activity from the last month indicates a growing interest from sellers and buyers in the Canadian housing market. The rise in market activity suggests that consumers are becoming more active in their real estate endeavors, potentially driven by favorable market conditions, increased affordability due to low mortgage rates, and a desire to secure housing before prices rise. These trends reflect a positive sentiment within the market and indicate a healthy level of engagement from participants.

8.Regional Market Highlights

The housing market in Ontario, particularly in the Greater Toronto Area (GTA), exhibited mixed trends in May 2023. While there were slight decreases in average home prices, sales activity increased, suggesting that buyers were taking advantage of the market conditions. British Columbia, specifically Vancouver and Vancouver Island, witnessed increased and decreased average home prices. Despite some fluctuations, the market remained active in these regions, driven by desirable locations and lifestyle amenities. Alberta and Saskatchewan demonstrated positive year-over-year price growth, showcasing the resilience of these markets. On the other hand, Manitoba experienced a decrease in average home prices, indicating potential localized factors impacting the market.

9.A Closer Look into the Canadian Housing Market in May 

Ontario

Looking at Ontario's housing market, the average home price in the province was $928,897 in May 2023. Although there was a slight decrease of 1% year-over-year, there was a 2% increase month-over-month. In the Greater Toronto Area (GTA), the average home sold price for May 2023 was $1,196,101. It represents a 1% decrease year-over-year but a 4% increase month-over-month. GTA home sales experienced a significant 24% year-over-year increase, with 9,012 transactions in April. These sales account for approximately 17% of all home sales in Canada during that month.

Other Ontario Cities

Examining other cities in Ontario, Hamilton's housing market saw a 10% year-over-year decrease in average home prices. Brampton experienced a 3% annual decrease in home prices. In the GTA, Oshawa's average home price increased by 1% year-over-year. However, Mississauga's average sold price decreased by 1% over the past year. Ottawa's housing market saw a 6% year-over-year decrease in home prices. 

British Columbia

British Columbia remains the most expensive province in Canada to buy a home. In May 2023, the average home price in British Columbia was $1,019,145. It represents a 3% year-over-year increase and a 2% increase compared to the previous month. BC is the only province in the country where the average cost of a home exceeds $1 million.

Notable trends in BC's housing market include a 13% year-over-year decrease in average home prices on Vancouver Island and a 15% year-over-year increase in Powell River. Victoria's home prices fell by 4% year-over-year to $1,018,619, while Greater Vancouver's average home price for May 2023 was $1,311,090, showing a 2% year-over-year increase.

Quebec

In Quebec, the average home price for May 2023 was $481,737, a 3% decrease compared to the previous year. However, there was a 4% monthly increase. The average home sold price in Montreal decreased by 2% year-over-year to $593,357 but increased by 5% compared to the previous month.

Atlantic Canada

Atlantic Canada experienced significant fluctuations in home prices. In May 2023, the average home price in Prince Edward Island (PEI) was $379,924, a 7% year-over-year decrease but essentially unchanged from the previous month. Nova Scotia's average home price of $458,175 represented a 4% increase from the last month and a 1% increase from the prior year. In Newfoundland, the average home price in St. John's decreased by 9% month-over-month to $271,953, an 8% year-over-year decrease. New Brunswick's average home price of $312,351 saw a 2% year-over-year decrease.

The Prairies 

Alberta is emerging as a hot housing market in Canada, with a 6% year-over-year increase in home prices, the highest in the country. In Saskatchewan, home prices experienced a significant 6% monthly increase compared to the previous month, the most effective monthly gain in Canada. For May 2023, the average home price in Alberta was $470,037, a 3% year-over-year increase and a 2% increase compared to the previous month. 

10.Takeaways

The Canadian housing market in May 2023 displayed a robust recovery with increasing home prices and growing market activity. The average home price in Canada reached $729,044, marking a 2% monthly increase and a positive year-over-year growth of 2%. Regional variations highlight British Columbia as the province with the highest average home price, followed closely by Ontario. Other provinces experienced unique dynamics and local market conditions. Mortgage rates range from 4.79% to 6.29%, emphasizing the importance of exploring various options. 

Ontario's market showcased mixed trends, with slight decreases in average home prices but increased sales activity. Overall, the Canadian housing market in May 2023 displayed resilience and positive momentum, providing a better housing market forecast 2023 for remaining year and opportunities for homebuyers, sellers, and investors.