Monday Market Minute | Mar 6, 2023

Spring housing market opens with cautious optimism as BoC pause holds

What Moved

The BoC held rates at 4.50% at its March 8 decision, reinforcing the conditional pause. Early spring listing activity across major Canadian markets showed the first meaningful uptick since the correction began. CREA's February data indicated a 2.3% month-over-month increase in national sales — modest but directionally significant. Toronto and Vancouver led the early recovery as price-sensitive buyers recognized that the bottom was forming.

Why It Matters

For private real estate investors, the spring market was the critical test. A functioning transaction market would allow for accurate price discovery after months of frozen volumes. Private REITs that had marked down NAVs in late 2022 needed sales comparables to validate whether adjustments were sufficient or whether further write-downs were necessary. Construction lenders, meanwhile, watched new project starts carefully — pre-sale absorption rates would determine the viability of the 2023 development pipeline.

Signal to Watch

CMHC housing starts data for the spring would reveal whether builders were confident enough to break ground despite elevated construction financing costs at 8–10%.

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