Canadian home sales rose 32.1% in November compared with the same month last year, matching the record-breaking year-over-year increase seen in October, the Canadian Real Estate Association said on Tuesday.
But the real estate association also says home sales edged back 1.6% between October and November, as the market settled into the traditionally slower winter season after Covid-19 delayed the spring rush.
“As expected, the level of activity continues to recede from the massively elevated levels observed a few months ago,” wrote Rishi Sondhi, an economist at TD Economics, in a note to clients.
“However, November was still a strong month, with overall activity firm and sales remaining high across the country. It’s likely that low interest rates and resilient employment in higher-wage industries [where homeownership rates are high], continue to underpin housing demand.”
Nasma Ali, founder of One Group Toronto Real Estate Inc., says that after peaking in spring, the real estate market normally sees a slight uptick after Labour Day and quiets by December, with little activity until after the new year.
But this year, Covid-19’s spring lockdowns created a bottleneck in June, and things have not died down much since, Ali says.
“It’s been very busy,” she says. “Obviously less busy than October. But it’s much busier than previous years around this time.”
CREA said 511,449 homes have been sold so far this year, putting Canada’s real estate market on pace for a potential annual sales record. For the first 11 months of the year, the real estate market is within 0.3% of 2016’s record, CREA’s report said.
“That means it’s possible that more people have moved this year than ever before, and I think it’s because there is something major that has come and changed all of our lives,” says Ali. “There are some companies that are never going to go back to being in a physical office, and so now people have reconsidered their future.”
The association says the inventory of home listings sits at a record low and is currently on track to last only 2.4 months, as new listings fell 1.6% in November.
Ali says she is seeing a “severe” shortage of single-family homes for sale in her area, as people often wait until the new year to list. Meanwhile, properties in outlying markets, like Oshawa, Ont. are seeing multiple offers as demand to buy homes stays steady.
The real estate association says the national average home price was $603,000 in November, up 13.8% from the same month last year. The figure would be nearly $122,000 lower if Vancouver and Toronto were excluded.
Ontario’s cottage country is leading with price gains of nearly 30% in some regions, while Ottawa, Montreal and Moncton have all seen price hikes of 15% or more, CREA said.
“Markets outside the core of the major cities remain extremely tight, and price growth should carry into 2021,” wrote BMO Capital Markets senior economist Robert Kavcic, who called the demand for recreational properties “ravenous.”
Despite the “blistering” increase in home sales this year compared to last, TD economist Sondhi noted that condo prices in Montreal, Toronto and Vancouver are not keeping up with the price increases for detached homes.
Although condo prices have not held up as well during the ongoing recession, Ali says the recent news of a vaccine has some of her buyers and sellers feeling more optimistic.
“Everybody needs bigger space, and everybody’s leaving the core for that. Restaurants, businesses, they’re all closed, so there’s no real need to be in a walkable area. Nobody wants to take transit anymore. It’s like the world is upside down right now,” she says,
“When the vaccine comes in, immigration comes back, students come back, tourism comes back. Condos will have a comeback, as well.”