Canada's housing market shattered more records in March, but there are signs the frenzy could start to find some semblance of balance as record supply hits markets.
National prices, as measured by the Home Price Index, were up 20.3 per cent compared to the same month last year, according to the Canadian Real Estate Association (CREA). Ontario continued to lead the way, followed by markets in B.C., Quebec, and New Brunswick. Prairie provinces and Newfoundland and Labrador were next with single-digit gains. Sales were up 76.2 per cent across the country.
While the year-over-year comparisons are stunning, it's important to consider the environment last March. A global pandemic, at least initially, brought the real estate market and the economy to a grinding halt.
The Home Price Index was up 3.1 per cent month over month, and sales were up 5.2 per cent.
Not a matter of weak supply
But there is a bit of good news for war-weary buyers. CREA says the number of newly listed homes climbed another 7.5 per cent for a new record in March. Combined with February's big rebound, new supply is up more than 25 per cent in the last two months.
"The big rebound in new supply to start the spring market is the relief valve we need the most to get that demand playing out more on the sales side of things and less on the price side," said CREA chair Cliff Stevenson.
"That said, it will take a lot more than one month of record new listings, but it looks like we may finally be rounding the corner on these extremely unbalanced housing market conditions. It's great news for frustrated buyers."
BMO senior economist Doug Porter says it's time to block out the noise about a supply problem, following record seasonally adjusted new listings in March.
"Please keep that simple fact in mind when you hear the inevitable onslaught of rhetoric about how the housing market's imbalance is all about weak supply," Porter said.
"The only possible world in which supply can be considered anything remotely in shortage is when stacked up against the extraterrestrial level of demand."
CREA says the new supply represents something of a shift from previous months - people wanting to hunker down in their homes and buyers scrambling to scoop up homes. But now sellers are more willing to put their homes on the market and some of the urgency to buy has dissipated.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.