Even with a small uptick in Canadian home sales activity in April, the key sales-to-new listings ratios careened lower to just 45.6% last month, said Bank of Montreal (BMO).
While the Canadian Real Estate Association (CREA) asserts that a ratio of 45% to 65% represents a balanced market, that still matches the lowest ratio since the Great Recession in 2008/09, noted the bank.
Such a low level is consistent with price declines, stated BMO.
Sure enough, prices drifted down another 0.1% month over month in April and are off 4% from year-ago levels. That brings the cumulative decline in average national prices to just over 20% from the "ultra-frothy" conditions in early 2022, pointed out the bank.
With that big pullback, home prices have now risen "just" 3.5% annualized over the past 10 years, barely outpacing average inflation of 2.8% over that span -- even with the price "wildness" during the COVID-19 pandemic, according to BMO.
The laws of gravity also apply to the Canadian housing market, added the bank.