Canada's housing market has yet to come out of winter hibernation, with sales subdued and prices still drifting lower at the national level, said Bank of Montreal (BMO).
Market conditions continue to vary significantly by region, but the big picture is that national housing momentum has yet to pick up, noted the bank after Thursday's Canadian Real Estate Association (CREA) data.
BMO continued to wait for the spring season for a clearer view, but still expects soft activity for most of the year.
Existing home sales were effectively flat in seasonally-adjusted terms in March at 0.1% month-over-month lower, and were down 2.3% from year-ago levels. The level of sales activity is still running very low, at roughly 17% below the 10-year average, with raw March activity the weakest for that month since the 2009 recession.
New listings also dipped 0.2% in the month and were down 4.9% from a year ago.
That left the sales-to-new listings ratio little changed at 47.8%, reflecting still-balanced overall national conditions, the bank pointed out. The coming months will be a good test of market balance, with some pent-up demand meeting pent-up listings that didn't sell since the fall.
How those two sides interact will determine if the market can tighten up through the rest of the year. Suffice it to say that when you're on the floor, the next direction is, eventually, higher, added BMO.
The national benchmark price slipped again in March and was down 4.7% year over year from a year ago. Short-term momentum hasn't improved much either, with the three-month annualized decline running at 7%.
After the initial deep correction, prices are now in the process of slowly "bleeding" until affordability is restored, according to the bank.