Low Supply, High Demand Pushes Average Canadian House Price To $607K

Home gross sales in December hit an all-time document for the month to finish what was additionally a document yr, the Canadian Real Estate Association (CREA) stated Friday.

December gross sales have been up 47.2 per cent in contrast with December 2019, the biggest year-over-year acquire in month-to-month gross sales in 11 years, the affiliation stated.

Sales for the month have been additionally up 7.2 per cent in contrast with November.

The record-shattering December marked the sixth consecutive month of year-over-year residence gross sales hikes. This comes after the COVID-19 pandemic led to shutdowns throughout the nation in the important thing March to May residence gross sales season. 

“This sweeping strength in sales heavily suggests that what’s driving this market are broad overall factors, and not local economic factors. Specifically, the plunge in interest rates last year and the pandemic-driven move to upgrade have lifted all markets,” stated Douglas Porter, chief economist at BMO Capital Markets Economic Research, in a consumer word about CREA’s report.

“Suffice it to say, it wasn’t at all obvious that this is how things would play out 10 months ago.” 

For 2020 as an entire, CREA stated some 551,392 houses have been offered, up 12.6 per cent from 2019, and a brand new annual document. In December, the seasonally adjusted annual charge of residence gross sales was 714,516, topping 700,000 for the primary time.

The precise nationwide common residence value was a document $607,280 in December, up 17.1 per cent from the ultimate month of 2019. CREA stated excluding Greater Vancouver and the Greater Toronto Area, two of probably the most lively and costly markets, lowers the nationwide common value by nearly $130,000.

Many of the areas with the most important value good points final month have been in Ontario, together with Belleville, Simcoe, Ingersoll, Woodstock and the Lakelands area, the place costs have been up greater than 30 per cent from December 2019.

Areas with extra modest value progress included Calgary and Edmonton, the place costs rose 1.5 per cent and a pair of.7 per cent, respectively. 

‘Major supply problem’

Shaun Cathcart, CREA’s senior economist, stated listings of latest houses will the “stat to watch” this yr heading into the spring promoting season, amid a “major supply problem” that might have an effect on affordability. 

Cathcart stated there have been fewer than 100,000 houses listed on the market to begin this yr, the bottom degree ever recorded CREA’s system, which dates again three a long time. Five years in the past, there have been about 250,000 listings, he stated in an announcement.

“We already have record-setting sales, but we know demand is much stronger than those numbers suggest because we see can see it impacting prices,” Cathcart stated. 

“So we have record-high demand and record-low supply to start the year. How that plays out in the sales and price data will depend on how many homes become available to buy in the months ahead.” 

This report by The Canadian Press was first revealed Jan. 15, 2021.

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