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Canadian Home Prices Set New Record High in January. Should We Be Worried?


It should come as no surprise that home prices continued their upward trajectory in January, setting a new all-time record.


The average price reached $621,525, a 22.8% year-over-year (not seasonally adjusted) gain from a year earlier, reported the Canadian Real Estate Association (CREA).


Home sales were also up 35.2% compared to January 2019, to an annualized rate of 736,452–well above CREA’s 2021 forecast for 583,635 sales this year.


“The two big challenges facing housing markets this year are the same ones we were facing last year–COVID and a lack of supply,” said Costa Poulopoulos, Chair of CREA.


Here are some other key stats for the month:

  • Newly listed homes were down 13.3% year-over-year.

  • The national sales-to-new listings ratio tightened to 90.7%–the highest level on record for the measure by a “significant margin,” CREA reported. The previous record was 81.5%, set 19 years ago, and well above the long-term average of 54.3%.

  • There were just 1.9 months of housing inventory in January, a new record low. This is how long it would take to liquidate current inventories at the current sales rate. In Ontario, there are now 35 markets with less than one month of housing inventory, up from 29 markets in December.

“The problem with this time of year is that the buyers and sellers that will in time define the Canadian housing story of 2021 are mostly all still waiting in the wings,” noted Shaun Cathcart, CREA’s Senior Economist.


“The best-case scenario would be if we see a lot of sellers who were gun-shy to engage in the market last year making a move this year,” he added. “A big surge in supply is what so many markets really need this year to get people into the homes they want, and to keep prices from accelerating any more than they already are.”


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