Canadian Real Estate Sellers Canceled 1 In 5 Listings Last Month

In December 2024, Canadian real estate saw a notable trend: one in five property listings were canceled by sellers. This information comes from a recent report by the National Bank of Canada (NBF). The cancellations suggest that many sellers are choosing to withdraw their properties from the market, possibly due to current market conditions.

During the same month, seasonally adjusted home sales decreased by 5.8%, marking the first decline after four consecutive months of growth. Despite this drop, sales were still 12.9% higher than in May 2024, before the Bank of Canada began reducing interest rates. This indicates that while demand has weakened, it remains stronger than earlier in the year.

On the supply side, new property listings fell by 1.7% in December. This decline was less steep than the drop in sales, leading to a 2% increase in active listings. The discrepancy between the decrease in new listings and the increase in active listings is partly due to the high number of canceled listings.

The rate of canceled listings has decreased from a peak of 26% in 2022 to 20% last month. However, this is still higher than pre-2020 levels, where such cancellations were rare. This ongoing trend suggests that the real estate market has not yet returned to typical patterns.

Many sellers appear to be postponing their listings, anticipating that the spring market will bring better conditions, such as lower mortgage rates and increased buyer interest. However, rising long-term bond yields could lead to higher fixed mortgage rates, potentially counteracting the benefits of recent interest rate cuts. Daren King, an economist at NBF, cautions that the impact of these rising bond yields on fixed mortgage rates will be important to monitor.

In summary, while recent policy measures, including a 50 basis point rate cut and the introduction of 30-year mortgages by the federal government, aim to stimulate the housing market, external factors like global bond market trends may influence their effectiveness. Sellers are advised to stay informed about these developments as they plan their strategies for the upcoming spring market.