Monday Market Minute | Jan 9, 2023

Canadian housing searches for a floor after the steepest correction in a generation

What Moved

CREA data confirmed that national home prices had fallen roughly 15% from the February 2022 peak, with some Greater Toronto submarkets down more than 20%. Yet early January listings in key urban markets showed modest buyer activity returning — the first tentative signs that the bottom might be forming. Sales volumes remained deeply depressed, down over 35% year-over-year.

Why It Matters

Housing is the connective tissue of Canadian private markets. Mortgage investment corporations, private REIT portfolios, and construction lenders all depend on price stability. A confirmed floor in housing would validate the underwriting assumptions behind billions in outstanding private credit exposure, particularly in the MIC sector where loan-to-value ratios had risen passively as collateral values declined.

Signal to Watch

January listing inventory levels in the GTA and GVA would indicate whether the spring market could produce a genuine recovery, or whether sellers would continue to hold back, keeping transaction volumes frozen.

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