Canada’s COVID-19 cases are surging, stricter rules are being implemented, and the economic recovery is sputtering but none of that seems to matter to home buyers in swathes of the country.
Sales were up 32.1 per cent nationally in October year over year according to the Canadian Real Estate Association (CREA). It was a record for the month and the fourth straight month sales were up in almost all markets versus 2019.
Sales fell 0.7 per cent compared to the previous month, but September was an all-time high for monthly sales. Shaun Cathcart, CREA’s senior economist, says 2020 has a real shot at setting an annual sales record.
“Many reasons have been suggested for why this is when many traditional drivers of the market, economic growth, employment and confidence in particular, are currently so weak. Something worth considering is how many households are choosing to pull up stakes and move as a result of COVID-19 and all the associated changes to our lives,” he said in a release.
“We could be seeing a lot of moves, or churn in the market, that would not have happened in a non-COVID world.”
Of course, buyers are also enjoying near-record low mortgage rates, which have juiced real estate’s improbable run.
Tight markets pushing prices higher
The national average home price also rose, 15.2 per cent to a record $607,250.
Due to Toronto and Vancouver’s outsized effect and differences in housing types, CREA calls its MLS Home Price Index (HPI) a better indicator. It’s up 10.9 per cent for the largest gain since 2017, with gains in single detached homes far outpacing condos, especially in Toronto and Vancouver.
Ontario’s Quinte & District and Woodstock-Ingersoll led the way with a 25 per cent overall HPI jump, followed by 20-25 per cent increases in Ottawa, London & St. Thomas, Tillsonburg District and a number of the province’s cottage regions.
The national sales-to-new listings ratio was 74.3 per cent, which means it’s close to being the tightest market on record. There was also only 2.5 months of inventory, which is the lowest it’s ever been.
“Very limited supply in areas that are seeing an influx of demand is boosting prices, with the pace across many markets ranging from solid to historic,” said Robert Kavcic, senior economist at BMO, in a note.
Even with all their troubles, Edmonton and Calgary managed to eke out HPI gains of 1.5 per cent and 1 per cent respectively.
Kavcic says conditions are ripe for 2020 to be a banner year for Canadian real estate.
“Pent-up demand might be running its course now, but there’s still a fundamental shift in preferences toward larger properties outside of core urban areas, greased by record-low mortgage rates. And, when there’s not much to choose from, prices lurch higher,” he said.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.