The Canadian Real Estate Association (CREA) says that Canada’s housing market has been floating between pre- and peak-pandemic levels during 2021’s final summer months, but conditions still remain fairly unbalanced.
In its monthly National Statistics report released today, CREA stated that home sales showed little change between July and August. Yet, last month’s numbers still make it the second-best August market in history. With a federal election looming, CREA pointed out that August’s numbers are further evidence that the country’s housing problems will not go away by themselves.
Here’s what we know about the Canadian housing market based on the latest information from CREA.
Monthly home sales dipped ever so slightly
Month-to-month, national home sales dipped 0.5 per cent in August. CREA commented that transactions “appear to be stabilizing at more sustainable but still historically active levels.”
On an annual basis, August sales were down 14 per cent from the same record-setting month last year. However, August 2021 is still the second-best month of August of all time.
“Canadian housing markets appear to be stabilizing somewhere in between pre- and peak-pandemic levels – which is to say, still extremely unbalanced,” said Shaun Cathcart, CREA’s senior economist, in the monthly report.
The number of local markets that reported an increase in sales versus those who recorded a decrease was a “fairly even split” last month. A drop in sales was noted in the Greater Toronto Area and Montreal, but levels were offset by a boost in sales within the Fraser Valley, Edmonton and Quebec City.
New home listings nudged upwards in August
From July to August, the quantity of newly-listed homes on the market grew by a mere 1.2 per cent.
Similar to sales activity, local markets were almost evenly divided between those who reported a boost in new listings and those who saw a drop. The GTA and Ottawa were among the larger Canadian cities that experienced a decline in new homes hitting the market, while new property listings climbed in Vancouver and Montreal during August.
At the end of August, there was 2.2 months worth of inventory available nationwide, down from 2.3 months worth of supply in July.
“This is extremely low – still indicative of a strong seller’s market at the national level and in most local markets,” noted CREA.
With sales and new listings staying relatively unchanged, Canada’s sales-to-new listings ratio dropped slightly from 73.6 per cent in July to 72.4 per cent in August.
Prices jumped more than 13 per cent annually
The actual (not-seasonally adjusted) national average home price was $663,500 in August, an increase of 13.3 per cent from 2020 to 2021. When excluding Canada’s priciest influential cities, Vancouver and Toronto, the national average drops over $130,000 in August to around $533,500.
The Aggregate Composite MLS Home Price Index (MLS HPI) rose 0.9 per cent on a monthly basis in August, marking it the first month-to-month acceleration in price growth since February.
Looking across the country, year-over-year price growth is averaging around 20 per cent in British Columbia, over 20 per cent in Ontario and slightly over 10 per cent in Manitoba. New Brunswick reported annual price growth little above 30 per cent in August.
Ongoing national housing challenges a key election component
Ideas on how to mend the housing market have been front-and-centre this election, said CREA’s chair, Cliff Stevenson, in the report. Long-term housing issues have also been brought under the spotlight this past year-and-a-half as a result of the COVID-19 pandemic.
“The numbers for August provided more evidence of what many of us already knew or suspected to be the case – this housing crisis will not go away on its own,” said Stevenson.
“As such, it’s encouraging to see all of the major parties looking at longer-term solutions to an issue that’s been around for a while. It also highlights how there are no quick fixes here, so this market will remain challenging for those who choose or have to engage in it,” he added.