Canadians didn’t let COVID-19 or a lack of housing supply stop them from flocking to the real estate market in January as they snatched up a record number of homes and shelled out more than they had in previous years.
Sales for the month were up 35.2 per cent compared with a year earlier — and sales for the first month of the year were up two per cent when compared to December, the Canadian Real Estate Association said Tuesday.
The actual national average price of a home sold also soared to a record $621,525 in January, up 22.8 per cent from the same month last year.
CREA said market conditions were pushed to record levels in January because people have held off putting their homes up for sale in the middle of the pandemic, leaving fewer options for people to fight over.
“The buyers and sellers that will in time define the Canadian housing story of 2021 are mostly all still waiting in the wings,” Shaun Cathcart, CREA’s senior economist, said in a statement.
Single family home prices rose 2.6 per cent month-over-month and a robust 17.4 per cent year-over-year, whereas apartment prices advanced by a smaller 0.2 per cent month-over-month and decreased 3.3 per cent year-over-year, TD Economics said in a statement after CREA released its report.
Buyers need boost in supply
However, Cathcart believes the market is unlikely to see a rush of listings until the public heath situation improves and the dreary winter weather subsides.
“The best case scenario would be if we see a lot of sellers who were gun-shy to engage in the market last year making a move this year,” he said.
(Canadian Real Estate Association)
“A big surge in supply is what so many markets really need this year to get people into the homes they want, and to keep prices from accelerating any more than they already are.”
With sales edging higher and new supply falling considerably in January, the national sales-to-new listings ratio tightened to 90.7 per cent — the highest level on record for the measure by a significant margin.
The previous monthly record was 81.5 per cent, set 19 years ago. The long-term average for the national sales-to-new listings ratio is 54.3 per cent.
Vancouver, Toronto markets still hot
CREA found the Greater Vancouver and the Greater Toronto Area, two of the country’s most active and expensive markets, were heating up very quickly in January.
The average seasonally adjusted price of a home in the GTA was $941,100 and in Vancouver, was just over $1 million.
When the association removed data from both those regions from the $621,525 national price average, it found the average price was slashed by $129,000.
But that doesn’t mean that conditions eased up outside the city centres, said Wins Lai, a Toronto real estate broker.
Cities outside Toronto also in demand
Prices in areas like Vaughan and Markham, Ont., have reached levels she is shocked by.
“Outside of the city in somewhere like Barrie, we are seeing 40 offers on something that’s $750,000, which is insane,” she said.
CREA said year-over-year price increases between 25 and 30 per cent were seen many regions in Ontario including Barrie, Niagara, Grey-Bruce Owen Sound, Huron Perth, Kawartha Lakes, London and St. Thomas, North Bay, Simcoe and Southern Georgian Bay.
According to the Canadian Real Estate Association, Montreal’s average home prices reached $434,200, up 16.6 per cent compared to last January. (Graham Hughes/The Canadian Press)
However, the largest year-over-year gains — above 30 per cent — were recorded in the Lakelands region of Ontario cottage country, Northumberland Hills, Quinte, Tillsonburg District and Woodstock-Ingersoll.
Urban sprawl and the pandemic are responsible for part of this phenomenon, Lai said.
“People want to be outside of the city, they want to have their own homes and they don’t want to be in elevators,” she said.
Other cities still attractive
While the downtown core may be less attractive because many people are working from home, young professionals and couples are still trying to snatch up homes there and bidding wars on condos are plentiful.
The CREA said January price gains were in the 10 to 15 per cent range in the GTA, Mississauga, Chilliwack, B.C., the Okanagan Valley in B.C., Winnipeg and on Vancouver Island.
Montreal’s average prices reached $434,200, up 16.6 per cent compared to last January.
They rose by as much as 10 per cent in Victoria, Greater Vancouver, Regina and Saskatoon and by about two per cent in Calgary and Edmonton.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
