Another report and another round of startling numbers from Canada’s housing market.
The Canadian Real Estate Association is reporting its best September ever. Sales rose nearly 46% compared to a year ago. That is 20,000 units more than the previous September record.
The average price for a home in Canada hit an ominous, record high as well, at $604,000 – a 17% increase y-o-y. Toronto and Vancouver continue to have a heavy influence on the average price. With those two markets factored out, the national average drops to $479,000, which is a 20% increase from a year ago.
CREA’s Aggregate Composite Home Price Index – which is seen as a truer measure of home prices – showed a 10% increase y-o-y.
The increases appear to be driven by people looking for more space.
“Home has been our workplace, our kids’ schools, the gym, the park and more. Personal space is more important than ever,” says CREA chief economist Shaun Cathcart.
A number of market watchers continue to forecast a cooling period over the next few quarters, but a dwindling supply of resale homes will keep upward pressure on prices. New listings dropped more than 10% in September. The sales-to-new listings ratio now stands at 77.2%, the highest in almost 20 years and the third-highest monthly level ever – solidly a sellers’ market.
However, historically low interest rates have many buyers feeling like they can handle the higher cost. So, the desire for space, and the fear of missing out (FOMO) may be stronger than traditional market fundamentals.