With the surprising rally in sales came a drop in new listings, which had a “considerable” impact on Canadian real estate markets, Cathcart said.

The number of newly listed properties was down 5.1% in December compared to November, dropping down to levels Canada hasn’t seen since June 2023.

In technical terms: The sales-to-new listings ratio tightened to 57.8% compared to just 50.5%. The long-term average ratio is 55%.

In other words: Canada is currently in a balanced market but teetering on re-entering sellers’ market territory.

Sales up, new listings down—what about prices?

Before we get into pricing, three months ago we told you about the base effect—a term in the statistics world that’s used to describe how results can greatly differ depending on reference points. Take, for instance, the current actual (not seasonally adjusted) national average home price of $657,145. Compared to December 2022, that figure is up 5.1%—making it seem like a noteworthy gain. However, to hit the highs experienced in 2022, the average price would need a whopping 24% gain.

The Aggregate Composite MLS® Home Price Index (HPI)—the most accurate tool available exclusive to REALTORS® to gauge a neighbourhood’s home price levels and trends—declined 0.8% on a month-over-month basis for the third straight month. December’s drop was smaller than the 1% decrease reported in November and the 0.9% decrease in October.

“We’re seeing prices look like they’re finally starting to stabilize as well,” Cathcart explained, before hinting at where he believes home prices are heading. “With markets suddenly much tighter, watch that MLS® HPI number next month, because I suspect that these declines are closer to being in the rear view mirror.”

Quarterly forecast revisions for 2024

Using all the latest CREA data, it’s expected 489,661 properties will trade hands across Canadian MLS® Systems in 2024, representing a 10.4% increase compared to 2023. The bigger sales gains in 2024 are expected to come from provinces where housing demand is strong (Alberta in particular), along with provinces that are expected to see a rebound from historically low sales volumes (British Columbia, Ontario, Nova Scotia).

Prices, on the other hand, aren’t expected to rise as sharply. The national average home price is forecast to climb 2.3% on an annual basis to $694,173 in 2024. Alberta, Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador are all forecast to see price gains in excess of the national increase. British Columbia and Ontario are forecast to see prices largely remain flat.

Remember, Canada’s real estate markets differ from province to province and region to region.