With two months still left to go in 2021, Canadian home sales have already achieved a record year, with October's data confirming that 2020's annual record for transactions has been broken.
Last month, home sales across the country rose by 8.6% from September, marking the largest monthly increase since July 2020, according to the latest data from the Canadian Real Estate Association (CREA).
The association says last month’s seasonally-adjusted sales reached 53,746, up from 49,485 in September. The Greater Toronto Area led the country for sales, accounting for 9,716 transactions, followed by Montreal (4,719), Greater Vancouver (3,558), and Calgary (3,046).
On a non-seasonally-adjusted basis, sales were down 11.5% to 52,538 from 59,344 transactions recorded during the same month last year. However, despite the annual decline, it was still the second-highest October on record by a sizeable margin.
On a year-to-date basis, some 581,275 residential properties traded hands between January and October, surpassing the annual record of 552,423 sales for all of 2020.
“2021 continues to surprise. Sales beat last year’s annual record by about Thanksgiving weekend so that was always a lock, but I don’t think too many observers would have guessed the monthly trend would be moving up again heading into 2022,” said Shaun Cathcart, CREA’s Senior Economist.
“A month with more new listings is what allows for more sales because those listings are mostly all still getting gobbled up; however, with demand that strong, the supply of homes for sale at any given point in time continues to shrink. It is at its lowest point on record right now, which is why it’s not surprising prices are also re-accelerating,” said Cathcart.
However, Cathcart did suggest a solution to the growing problem: build more homes. Over the past year and a half, there's been a chronic insufficiency of housing supply that's temporarily worsened due to pandemic-related factors like record-low mortgage rates and a shift in preference for housing.
The association says the number of newly listed homes rose by 3.2% month-over-month in October, driven by gains in about 70% of local markets. And with so many markets starved for supply, CREA says it’s not surprising to see sales go up in months when more properties go up for sale.
In October, the number of new listings amounted to 61,128, down almost 20% from 76,046 at the same time last year.
CREA October 2021
With sales up by more than new listings in October, the sales-to-new listings ratio tightened again to 79.5% compared to 75.5% in September and 73.5% in August. In comparison, the long-term average for the national sales-to-new listings ratio is 54.8%.
Considering that we're seeing some of the tightest market conditions ever recorded, prices for homes continue to rise, with the national average home price reaching $716,585 last month, up 18.2% year-over-year.
However, when excluding the Greater Vancouver and Greater Toronto Area from the current average price, it cuts more than $155,000 from the national average price.
“After a summer where it looked like housing markets might be calming down a bit, October’s numbers suggest we might be moving back towards what we saw this spring, with regards to current market demand and supply conditions,” said Cliff Stevenson, Chair of CREA.
“That said, one month of data is not a trend, so we’ll be watching how the balance of this memorable year plays out closely," added Stevenson.