Canada’s housing market continued its impenetrable run in August as average prices rose nearly 20 percent from where it was a year ago, and the number of homes sold broke a monthly record.
The Canadian Real Estate Association, which represents more than 130,000 realtors across the country, said on Tuesday that 58,645 homes were sold this month, up 33 percent from the same month last year. This is six per cent more than the number of homes sold in July, This is a record per month.
August is usually not too busy for home sales. Typically, the market begins slowly in the winter before spring arrives, cools in the summer, and snows at the end of the year before the cycle begins anew in January.
Lockdowns in March and April delayed most home purchases and 2020 threw those seasonal trends out the window, pushing the purchase period to the end of the year.
Even with the last-counted global pandemic Has wiped out more than a million jobs from Canada’s labor market, The sixth-busiest month on the home sales record last month, and the busiest month in August.
Prices are also skyrocketing. The average price of a Canadian home sold last month was 6,586,000. This is an increase of 18.5 per cent over the same month last year.
CREA said large sales in more expensive markets such as Toronto and Vancouver could reduce this number so that the average price could be misleading.
So CREA calculates another number called the House Price Index, which the group says is a good gauge of the market because it adjusts the size and type of homes in the markets.
HPI rose 9.4 percent in August. This is the biggest annual leap since 2017.
“It has been a record-breaking summer in many housing markets across Canada, as realtors and their clients will catch up after much loss in the spring market by 2020,” CREA Chair Costa Paulopoulos said in a news release.
“The spring market seems to have turned into summer.”
Economists suspect that the torrid pace could continue
TD Bank economist Brian Depratto said the numbers suggest the market should continue to “defy gravity” in a way that will tear them apart anyway, but he wonders how long this will last.
“The lack of a spring market is an important factor behind the summer season. As of August, the level of sales activity is now in line with historical norms, indicating that this pent-up demand is largely satisfactory,” he said.
True, despite declining sales The lowest level in decades In the early months of the lockdown, 341,463 homes changed owners in the first eight months of the year so far in 2020. This is 0.8 per cent ahead of last year’s sales.
“While the Canadian housing markets have a habit of making fun of them in the past, the fundamentals are agor to partially withdraw sales activity for the rest of the year.”
Although the new listings are growing faster than sales for the first time since the epidemic, the ratio of listings from sales is still at its tough level in 15 years, according to Bank of Montreal economist Sal Guterre, who calls it “a recipe” for high prices. “
But he, too, has doubts about whether the emerging market can continue. “Pent-up demand seems to be running its course, and we’ll see where underlying sales settle down. Some parts of the country are very hot. Others are not.”