Canadian home sales broke another record in October, rising by more than 32 percent over the previous year and beating the past record for the month by over 14,000 transactions.
The October market data, published today by the Canadian Real Estate Association (CREA), was strong enough that 2020 is on track to easily surpass last year’s home sales total despite the major hit the market endured during the spring shutdown.
In a research note penned after the CREA data was published, BMO Senior Economist Robert Kavcic said 2020 “will be a banner year for the Canadian housing market.”
According to CREA data, there have been 461,818 home sales in the first 10 months of the year, up 8.6 percent from the same period a year ago. The organization also pointed out that the January to October period in 2020 only trails 2016 when it comes to historical highs in home sales tallies.
In his note, Kavcic acknowledged that October’s sales total inched down from the high point reached in September, but considering the three consecutive record-breaking months seen through the summer, some easing should not be surprising.
As for whether the impressive October result can be traced back to pent-up demand held over from the spring, the BMO economist isn’t convinced that it’s the only factor driving sales.
“[T]here’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,” wrote Kavcic.
At a national level, home prices in October were pushed up by 10.7 percent over the previous year. This is the fastest rate of price appreciation recorded by CREA’s Home Price Index since August 2017. Kavcic said that locally, price gains range from 1 percent to 1.5 percent in cooler markets like Calgary and Edmonton, up to above 20 percent in Ottawa and suburban Toronto region markets.
“[B]ig 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’ desire for homes outside of urban centres.
As for where the market is heading in 2020’s remaining months, CREA Senior Economist Shaun Cathcart said that anyone waiting for the market to settle down will “have to wait a little longer.”
