Amid a pandemic-driven shift in demand as well as a surge in new listings, the Canadian housing market remained strong in August, RBC Economics reports.
Citing preliminary data from local real estate boards, RBC said that markets in many areas of the country remained “red hot” in August.
“But the bigger story might be that Covid-19 is now prompting more people to sell,” the report said, noting that new listings surged in urban centres such as Toronto, Ottawa and Vancouver.
“We think this in part reflects the pandemic altering the housing needs of many current owners — who are opting to move, something they might not have considered just a few months ago,” it said.
RBC noted that the Toronto market saw new listings jump 57% year over year in August, powering a 40% increase in home sales.
Sales were up more than 20% from July’s near-record levels, it said.
“Clearly, [that] market has fired on all cylinders this summer, making up for the major disruption caused by Covid-19 in the spring,” RBC said.
The primary drivers of sales activity and higher prices were low-rise homes, including single-detached homes, RBC reported.
“Demand-supply conditions are very tight in these categories, with intense competition between buyers,” it said.
Vancouver also saw heady growth, RBC noted, with resales up 37% year over year in August, amid a 55% increase in new listings.
In Calgary, resales were essentially flat in August compared with the same month a year ago, and down about 5% from July.
“A drop in available supply is partly to blame,” the report noted, as new listings fell 8.6% year over year.
“The weakness was entirely concentrated in the condo segments where sales plummeted 20%,” RBC said, adding that sales of single-detached homes rose 5.5%.
“Buyers nationwide are demonstrating a stronger preference for single-detached homes,” the report said, noting that this is supporting stronger price growth in that category too.
“We expect single-detached and condo valuations to continue to diverge in the period ahead,” the report added.