Photo: Reg Natarajan/Flickr
Canadian home sales stayed put in October, preserving the gains made through the spring and summer seasons and keeping the sales total comfortably above the 10-year average for the month.
Although they were virtually unchanged when compared to September, nation-wide sales rose by nearly 13 percent over October 2018 with the market continuing to tighten up as new home listings dropped by nearly 6 percent year-over-year. Meantime, home prices on the national level rose at the fastest pace observed in 2019 thus far.
The more bullish housing market observers may have expected a stronger showing in what is typically a hot month for sales, but Canada’s big bank economists were touting the October result as proof that housing has become a “growth driver” for the economy again.
While he acknowledged the CREA report contained “no big news,” BMO Chief Economist Douglas Porter viewed the October results as a “stark change” from the previous year and more evidence that the country’s housing market has “brushed itself off and is firming again.”
“[T]he solid results simply drum home the point that the housing sector has returned to the status of a growth driver, rather than the growth dimmer it had been over the past two years,” Porter wrote in a note published today.
The BMO economist also noted that the regional picture remained largely the same in October, with major markets east of Winnipeg largely responsible for the strength in sales and price growth. Porter did point out, however, that there’s some evidence of life in the beleaguered Vancouver and Calgary markets, both of which saw significant sales gains last month when compared to 2018 results.
TD economist Rishi Sondhi noted that October was the second month in which the Liberal government’s First-Time Homebuyer Incentive was in effect.
“Although it remains too early to tease out an impact, our forecast anticipates a modest boost to demand and prices from the program,” Sondhi wrote.
So while the October results weren’t the pre-holidays feat of housing strength they could have been, the consensus is that the market is in a favourable position heading into 2020.