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The average price of a Canadian resale home rose more than 15% over the year through October, the Canadian Real Estate Association said Monday.
The group representing more than 130,000 real estate agents across Canada said last month was the busiest October ever for home sales, continuing a trend that began in May after the COVID-19 freezes in March. and April froze the market.
Although sales plummeted in the early days of the pandemic, they have since been on fire. Approximately 56,186 homes changed hands during the month, bringing the total 2020 tally as a whole to 461,818. This is the second busiest 10-month period ever.
Sales have continued to grow from normal levels and prices seem to do the same thing.
The average price of a resale home sold on CREA’s MLS system was $ 607,250. It increased by 15.2% compared to last October. Six provinces recorded double-digit gains and one – Manitoba – narrowly missed it, at 9.6%
CREA warns that the average selling price can be misleading, as it tends to be biased upward by expensive home sales in places like Toronto and Vancouver, so it publishes another number, known as the Multiple Listing Service House Price Index, or MLS HPI, which adapts to the size of the market and the type of house.
The HPI MLS increased 10.9% in the year through October. This is the fastest annual increase in more than three years, dating back to July 2017, before the government implemented stress test rules aimed at slowing the market.
Buyer preferences
Continuing a trend that has been observed since the start of the pandemic, homebuyers are showing a preference for two things: more space and larger homes just outside the big cities.
“The real selling point of prices is in the markets just outside (let’s call it one to two hours) of the largest urban centers,” BMO economist Robert Kavcic said in a research note.
A number of markets spread across southwestern Ontario are posting annual gains of over 20% right now, he said.
“On the flip side, big cities, while still experiencing price growth, are losing ground on a relative basis. For example, Vancouver is currently underperforming the Okanagan Valley; and Toronto is now outperforming significantly surrounding markets such as Georgian Bay, Barrie and London / St Thomas “.
TD Bank economist Rishi Sondhi said that while it is still growing over the long term, sales volume slowed by 0.7% in October from the previous month, which could be a sign that pent-up demand caused the pandemic is dissipating.
“Sales are likely still well above the levels supported by the fundamentals in October [and] from our point of view, they can only remain so for so long, “Sondhi said.” Therefore, we look for activity to continue to cool in the coming months. And the possibility of more widespread lockdowns could add further downward pressure to continuing sales. “
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