Home sales in January went down by 2.9% as major markets continued to grapple with tight housing supply, according to the latest figures from the Canadian Real Estate Association (CREA).
The seasonally-adjusted decline in the overall market activity was primarily due to the 18% slowdown witnessed in the Lower Mainland of British Columbia.
Actual sales activity during the month was still up by 11.5%, with transactions growing year-on-year in about two-thirds of all local markets.
Some of the larger housing markets where sales declined, like Ottawa and Windsor-Essex, were currently among some of the tightest-supplied areas in the country, according to CREA.
Also read: Ontario, Quebec lead gains in housing starts
Despite the sales decline, home prices continued to pick up in these tightly-supplied markets, particularly in Southern, Central, and Eastern Ontario.
Markets with historically-tight supply typically record larger-than-normal drop in new listings at this time of the year, said Shaun Cathcart, senior economist at CREA.
"The logic being that if you are a seller, you're not just choosing when to list but effectively when to sell, so why not hold off until the spring when the weather is better, and more buyers are looking? Deferred listings mean deferred sales, which could explain some of January's decline in activity," Cathcart said.
Over the month, the number of newly-listed homes increased at a marginal pace of 0.2%. Calgary, Edmonton, and Montreal all posted a decrease in new listings while York and Durham Regions of the Greater Toronto Area (GTA) witnessed a strong rebound in supply.
Given the decline in sales and the slight uptick in new listings, the national sales-to-new listings ratio fell back to 65.1%. This proportion, however, was still higher than the long-term average of 53.8%.
"Based on a comparison of the sales-to-new listings ratio with the long-term average, close to two-thirds of all local markets were in balanced market territory in January 2020. Apart from a few areas of Alberta and Saskatchewan, the remainder were all favouring sellers," CREA said.
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