It's safe to say that in light of all the repercussions of the pandemic, no one could have ever guessed that the Canadian housing market would be on pace to have a "banner year."

Last month, national home sales dipped 0.7% in seasonally-adjusted terms, but they still managed to break another October record after soaring more than 32% year-over-year.

And if that wasn't impressive enough, October home sales also beat the previous record for the month by over 14,000 transactions, according to a recent market report from the Canadian Real Estate Association (CREA).

READ: 2020 ‘In the Running’ to Be Best Year on Record for Canadian Home Sales: CREA

Subsequently, BMO Senior Economist Robert Kavcic said 2020 “will be a banner year for the Canadian housing market.”

However, Kavic did note that following three-months of record sales actively -- which can be attributed to pent-up demand from the spring -- some easing of sales should be expected in the months to come.

"That said, sales on a year-to-date basis are now up 8.6%, and this year’s total volume looks like it will handily eclipse 2019. So, there’s more than just making up for lost time going on and, as we’ve been arguing since the pandemic began, there appears to be a wholesale shift in housing preferences that is seeing households trade out/up to more space outside of core urban markets," explained Kavic.

In other words, the urban exodus trend -- which is when people move to rural areas from large towns and cities  -- is becoming more apparent.

New listings rose 2.9% in October -- leaving the market "extremely tight" -- while the national sales-to-new listings ratio fell a few notches to 74.3%. While this is still down from September, Kavic says this still effectively reflects the tightest market in 15 years or so.

However, as more city dwellers continue looking for more space, the lack of supply is boosting prices, with the pace across many markets ranging from "solid to historic."

At a national level, home prices in October rose 10.7% over the previous year, which is the fastest rate of price appreciation recorded by CREA’s Home Price Index since August 2017. Kavcic said that locally, modest price gains range from 1-to-1.5% in cooler markets like Calgary and Edmonton while they can be as high as more than 20% in Ottawa and various markets outside of the Greater Toronto Area (GTA).

READ: Has COVID Really Resulted in Toronto Residents Fleeing to the Suburbs?

What's more, Kavic noted that while sales are up strongly across every province, with the exception of PEI, British Columbia led the pack in October, up 44.7% year-over-year. Among the major markets, Ottawa led with price growth of 22.4% year-over-year while Montreal was not too far behind at 15.4% year-over-year.

“Big cities, while still seeing price growth, are losing ground on a relative basis. For example, Vancouver is now underperforming the Okanagan Valley; and Toronto is now significantly underperforming surrounding markets like Georgian Bay, Barrie and London/St. Thomas,” wrote Kavcic, speaking to homebuyers’ changing buying behaviours.

Kavic also noted that single-detached dwellings are "significantly" outperforming condos, with the former up 12.7% on a national basis versus 5.7% for the latter. In Toronto, condo prices are effectively flat versus March levels, while single-detached prices have jumped 12.2% annualized.

As for what's to come, Kavic says 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, bolstered by record-low mortgage rates.

It's worth noting, however, that CIBC Deputy Chief Economist Benjamin Tal recently suggested that a market slowdown was coming to the Canadian real estate sector, stating:

“Even the governor of the Bank of Canada is telling us, listen, don’t expect any growth basically over the next six months. The party’s over. You can’t have a o% increase in the economy with the housing market continuing to boom.”

As with all things, real estate included, only time (and potentially vaccines) will tell where the market goes from here.

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