CREA: Home sales see biggest increase since July 2020
The Canadian Real Estate Association says home sales across the country in October saw the largest increase from the previous month since July 2020, although new listings were down about 20 percent year over year.
The association says seasonally adjusted sales reached 53,746 last month, up about nine percent from 49,485 in September.
On a non-seasonally adjusted basis, sales were 52,538, down 11.5 percent from 59,344 in October last year.
Brokers and economists interpreted the year-on-year decline in sales, together with shrinking inventories and rising prices, as a sign of a further narrowing of the market.
While buyers rushed to buy property late last year despite COVID-19 restrictions ruining their vacation plans and physically distancing them, this year is different.
“Buyers are very discouraged, very tired, and just feel like they are being priced all the time,” said Nasma Ali, a real estate agent at Remax Hallmark Realty.
“Lots of buyers say it might not be on the books for us this year, and maybe we should take a break and start looking in the new year.”
They are discouraged because fewer homeowners are willing to get their homes on the market.
“The people who want to move up are crippled because they can’t find anything to move until they can sell their house,” said Ali.
In the past month, 61,128 new entries were registered, almost 20 percent fewer than 76,046 at the same time last year.
Sherry Cooper, chief economist at Dominion Lending Centers, sees no improvement in the offerings.
“Canada continues to grapple with one of the worst housing problems in the developed world,” she wrote in a statement to investors.
“As our borders open to a resurgence of immigration, the excess demand for housing will increase.”
This could result in sellers getting prices even higher than last month.
The non-seasonally adjusted national average home price was $ 716,585, up 18.2 percent from October 2020.
Excluding Greater Vancouver and Greater Toronto from this calculation saves the national average price more than $ 155,000.
BMO Capital Markets Senior Economist Robert Kavcic believes that as prices soar, it is time for the government and regulators to contain current conditions.
“The Canadian real estate market is long overdue for higher rates and the momentum is still on the up until it gets to it,” he wrote in a note to investors.
He interpreted the October figures as a sign that the market was “completely solid” after a “slowdown” in the summer.
“The market is still drum-solid and demand is still enjoying itself thanks to low mortgage rates, a strong labor market, the expectation of further price hikes, and likely some additional activity before mortgage rate hikes (especially for those with a contract in hand).” He said.
Ali sees some of the exhaustion of buyers as the new year begins, especially if rates stay low, but she believes the offer will be difficult to come by for months to come.
“January, February there will be a lot more buyers and we will all have tired and exhausted people coming back now in January and February and we are still out of stock,” she said.
“So January won’t get any better, but I think spring, when there are more camps, will be a little better.”
This report from The Canadian Press was first published on November 15, 2021