A record-breaking number of transactions in December was more than enough to seal the deal for 2020 on its path to becoming the best year for Canadian home sales on record.
There were 551,392 home sales last year, 2.3 percent higher than the previous annual record achieved in 2016’s blazing housing market. According to new data published today by the Canadian Real Estate Association (CREA), 2020’s sales total outmatched the previous year’s by 12.6 percent as well.
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And don’t expect homebuyer demand to dry up anytime soon is the message from CREA’s Chair Costa Poulopoulos, who is anticipating a busy spring season provided the current second wave of COVID-19 is better under control by then.
But with buyer demand, supercharged by low mortgage rates and shifting preferences, expected to be riding high for some time, discussions at the national level about a lack of housing supply are becoming more urgent.
“The stat to watch in 2021 will be new listings, particularly in the spring — how many existing owners will put their homes up for sale?” said CREA Senior Economist Shaun Cathcart, in a media release. “We already have record-setting sales, but we know demand is much stronger than those numbers suggest because we can see it impacting prices.”
Cathcart pointed out that on New Year’s Day, there were fewer than 100,000 homes on the market across Canadian MLS systems. This is the lowest level observed based on three decades of records that are available. The economist called this a “major supply problem.”
“Compare that to five years ago, when there was a quarter of a million listings available for sale. So we have record-high demand and record-low supply to start the year. How that plays out in the sales and price data will depend on how many homes become available to buy in the months ahead,” he said.
CREA said that the national average home price for December was also a record at $607,280. Its MLS Home Price Index, which smooths out monthly fluctuations to prices, was up 13 percent last month, the largest gain recorded since June 2017.