Growth in resales and fewer new listings conspired to drive up the aggregate price of a Canadian home in September, led by local markets in the two largest provinces, says a report from RBC Economics.

The aggregate price of a Canadian home increased by 1.7% on a monthly basis to $750,400 last month -- housing prices surged by 21.5% from September 2020 -- as new listings dipped by 1.6% from a month earlier and by 19.6% year-over-year. Resales in Ontario rose by 0.9% month-over-month, with Barrie, Cambridge and Windsor recording increases of 11%, 10% and 8%, respectively. In Quebec, Trois-Rivieres saw resales grow by 11% from a month earlier, followed by Gatineau at 10%. Although resales in the Greater Toronto and Montreal areas increased on a monthly basis in September, smaller markets comprised the lion’s share of activity in each province.

Despite cooling conditions lasting from spring through summer, the likely results of fewer immigrants entering the country during the pandemic combined with buyer fatigue, activity rebounded in time for the fall market. RBC attributes the boost in countrywide resales to pent-up demand. Moreover, the persistent dearth of inventory has kept sellers firmly in the driver’s seat, leaving many buyers nary a choice but to engage in bidding wars. RBC says such conditions will continue until affordability deteriorates, which will trigger a moderation in activity that will cause housing prices to flatten sometime in the second half of 2022.

“Already-tight demand-supply conditions firmed up some more,” RBC’s report from Robert Hogue said. “The national sales-to-new listings ratio got deeper in sellers’ market territory, rising from 0.73 in August to 0.75. The number of months’ sales in inventories, at a tiny 2.1, also points to sellers holding significant sway on pricing. This was generally the case across the country with only the degree of sellers’ advantage varying from market to market. More balanced conditions have emerged in some Prairie markets, including Regina and Edmonton.”

READ: Average Canadian Home Price Forecast to Reach $771,500 By End of Year

According to the Canadian Real Estate Association, the sales-to-new listings ratio signifies the market is settling into current conditions, which may prove cumbersome for homebuyers. The long-term national average is 54.8%, CREA noted.

In September, national home sales rose marginally by 0.9% month-over-month to 48,949, according to CREA data, and while transactions declined by 17.5% year-over-year, last month marked the second-highest September on record for sales.

“September provided another month’s worth of evidence from all across Canada that housing market conditions are stabilizing near current levels,” said Cliff Stevenson, Chair of CREA.

“In some ways that comes as a relief given the volatility of the last year-and-a-half, but the issue is that demand-supply conditions are stabilizing in a place that very few people are happy about.”

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