Canada’s population is growing at the slowest pace in years, but buyers are facing a busy market. Canadian Real Estate Association (CREA) data shows record home sales for September. The increase in home sales is largely due to a seasonal shift, after the lockdown.
Canadian Real Estate Sales Are Up 46%
Canadian real estate sales set a new record for the month. On a seasonally adjusted basis, there were 56,422 homes sold in September, up 0.9% from the month before. Unadjusted the number comes in at 61,308 sales, up 46.6% from the same month last year. This is the most sales for any September on record, according to CREA. The seasonal shift that was expected, is a little more obvious after viewing an overlay of years.
Canadian Real Estate Sales
The unadjusted sales for all home types, as reported through the Canadian MLS. Source: CREA, Better Dwelling.This Is The Fastest Rate of Growth Since 2010
Growth accelerated to the highest level in over a decade. The rate of growth showed a fifth consecutive month of acceleration. At 46.6%, the 12-month increase is now at the highest level since 2010. There’s a common theme amongst the two periods – both followed negative growth. This once again confirms the pent-up demand agents are talking about. Buyers that could not buy during the pandemic, were delayed in their purchase. The vast majority were not eliminated.
Canadian Real Estate Sales Change
The annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS. Source: CREA, Better Dwelling.Canadian Real Estate Sales Are Still Playing Catch Up
Looking at the rolling average, it’s a little more clear that a lot of this growth is just catching up. The 12-month rolling reached 42,371 in September, up 7.4% from the same month last year. While there’s record sales over the past few months, it’s still nothing like it was from 2015 to 2018. Even if it really doesn’t feel that way.
Canadian Real Estate Sales: Rolling Average
The 12-month rolling average of Canadian real estate sales. Source: CREA, Better Dwelling.Canadian real estate sales reached record levels, expected due to the seasonal shift. Spring buyers that faced a lock down, were mostly pushed to Summer. Those Summer buyers are still catching up in the Fall. This is likely to persist for at least the rest of the year, as pent-up demand catches up. The same trend is likely to make sales volumes look weak next year, if normal seasons play out.
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Do you view this as a result of record low-interest rates?
Do you see this sales pace and price increase continuing into 2021?
Low rates don’t just inflate budgets, they also pull forward demand. That’s likely why the pent up demand is still so much higher these days. Eventually that stimulus wears thin though. Unless there’s a lockdown in the Spring, it falls during the same period at it traditionally does.
LOL. Just wait until next spring.
I suspect many are still jumping from condos and working in an office tower to a front door and a piece of grass while working at home.
I think it will be the spring until all of this starts to shake out.
Pump it up , pump it up Bank of Canada, and show growth and do not think of its consequence for more than %50 of Canadian with growth income of $35000 or lower a year .
Although I agree this is an awful situation for median income earners wanting to own a home of their own, This situation may translate into quite affordable rents in the next year or so. This will be good as savings rates will go up for those trying to save some money for housing.
It may be important for people to resist the urge to get into the market thinking they’re getting a great deal if it corrects 10%. At some point we have to realize that owning a tiny apartment condo is not better than renting one if you can rent for 75% of the cost of ownership – with no risk for tax/condo fee increases or loss of capital in market correction.
If first time buyers get into a small condo and any of the previously mentioned 3 situations occur, one may never afford a freehold or townhome for YEARS and be stuck in a small apartment, watching as peoples that waited out the market while renting for less and saving more, buy the home they really want.
At some point Canadians were convinced the only way to save was to continuously move and have starter homes, normal homes, then there “dream home” then forever home. This has worked out the past 10 years but the party must end at some point.
With Rents falling for large condos in reasonable areas I’m not sure why anyone would want to buy condos right now. If I were a renter in good standing, I would re-negotiate for cheaper rent and save the difference and wait to purchase the home I actually want. No negotiation, slowly start packing up and look for the rent deals to flood in starting winter 2021!
There are already rental deals now so winter 2020 is more apt.
Rents have dropped 30% from 2019 peak back down to 2015 levels and the LLs that have not adjusted are vacant since March 2020.
Rents can actually drop lower as 30K (each year) condo units and purpose built rentals were scheduled to be completed in 2020 and 2021.
Covid-19 delayed completions by 6+ months but they are in the pipelines along with the 12+K units (as of Sept 2020) currently available for rent.
C.D.R
Yeh , There is a solution for that, Government will open the border and hundred thousands of immigrant to come in make up for 2020 year then rent sky rocket again in no time .