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Special Report

Canada Housing Research Brief

March 2023

The Bottom of Canada’s Housing
Market Downturn is in Sight

Uptick in activity expected as spring months near. February marked the one-year anniversary of Canada’s housing market slowdown. On a year-over-year basis, the price of a single-family home has dropped 16 per cent as elevated borrowing costs curbed buyer enthusiasm and created further affordability hurdles. Nonetheless, positive signs are emerging as the Bank of Canada has paused rate hikes, with further increases unlikely. Additionally, national home sales posted a 2.3 per cent monthly increase in February, while new listings fell 7.9 per cent. As a result, the sales-to-new listings ratio increased, indicating that buyers are emerging from the sidelines and forced sales have not yet occurred. While the price of a single-family home declined 1.2 per cent month-over-month in February, this was the smallest drop since last March. Consequently, price stabilization may occur over the coming months as borrowing costs have likely peaked and transaction activity tends to rise in the spring months.

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