"Sales are up, market conditions have tightened quite a bit, and there has been anecdotal evidence of renewed competition among buyers," said Shaun Cathcart, CREA's Senior Economist.

Whispers of the housing market finally picking up steam this year have now turned up to full volume, with the latest data from the Canadian Real Estate Association (CREA) revealing a 22% annual jump in home sales in January — the largest year-over-year gain since May 2021.

Sale numbers were also up from December, climbing up 3.7% month over month. This built on the 7.9% month-over-month increase seen in December.

"Sales are up, market conditions have tightened quite a bit, and there has been anecdotal evidence of renewed competition among buyers," said Shaun Cathcart, CREA's Senior Economist.

Unsurprisingly, gains were led by many of the country's most populous markets, including the Greater Toronto Area, Hamilton-Burlington, Montreal, Greater Vancouver, the Fraser Valley, and Calgary.

Cathcart notes, however, that "in areas where sales have shot up most over the last two months, prices are still trending lower." The Aggregate Composite MLS Home Price Index fell 1.2% month over month in January, slightly up from the 1.1% decline seen in December.

"Taken together, these trends suggest a market that is starting to turn a corner but is still working through the weakness of the last two years,” Cathcart said.

Price declines were largely present in Ontario, CREA says, particularly in the Greater Golden Horseshoe. Declines were also seen in British Columbia, albeit to a lesser extent. Most other markets managed to hold firm, with some like Alberta and Newfoundland and Labrador managing an increase in sale prices.

On an annual basis, the average national home price was still up, sitting at $659,395 — 7.6% higher than in January 2023.

As sales increased, so too did the number of new listings, edging up 1.5% on a month-over-month basis in January. Although it's an improvement, listing levels are still close to the lowest level seen since last June. And since listings did not keep pace with the jump in sales, the national sales-to-new listings ratio tightened further to 58.8%, edging closer to a sellers' market (above 65%).

At the end of January, there were just 3.7 months of inventory left — much lower than the long-term average of about five months.

“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,” said Larry Cerqua, Chair of CREA. “There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023."

Storeys (Laura Hanrahan, February 14, 2024)