Average real estate price rose by 17% in September

Last month, the average cost of a property sold on the Canadian Real Estate Association’s MLS service was up to $604,000, marking a new record and a 17% annual rise.

Moreover, it was also the busiest September in terms of the home sales, with an additional 20,000 transactions on top of the previous record result.

These numbers are the latest ones concerning the national real estate market, which has been exceeding all expectations since March.

The pandemic led to a drastic home sales decline in March and April because of massive lockdowns. However, the sales were growing sharply every month since then.

Because people had to spend months in their homes, it looks like they understood they need more space, that’s why detached houses in suburbs near major cities are pushing the gains. “Home has become our workplace, our kids’ schools, the gym, the park and more,” – noted CREA’s chief economist Shaun Cathcart said. “Personal space has never been so important.”

According to CREA, the average price is not the best reflection of the market conditions, as it is distorted by sales of expensive homes in Toronto and Vancouver. In case we exclude these cities from calculations, the average home price would be $479,000. But that number has risen by more than 20% over the past year.

It’s true. We can see growing sales in the suburbs not only near Toronto and Vancouver. “We’ve also seen higher demand for homes outside of the city in our bedroom communities, especially in the recreational properties sector,” – noted said real estate broker Corinne Lyall with Royal LePage in Calgary. Last month, there were 2,405 home sales in the city, which is 30% more than a year ago, and 10% more than in August.

In addition to it, the real estate market is supported by extremely low interest rates. As a result, the housing market’s activity growth amid a pandemic starts to seem logical.

“The main question is whether this pace is sustainable,” – TD Bank economist Rishi Sondhi said.

He explains a large part of the current boom by a strong demand after a weak spring. But that’s almost over now, so “home sales are expected to cool over the next few quarters,” – Sondhi added.