Canadian real estate market shows another record price increase

In January, Canada’s real estate prices showed a record monthly hike, caused by a decline in the number of listings leading to extremely tight market conditions.

According to a new report by the Canadian Real Estate Association (CREA), an average house price rose by 21% during the previous year and reached $748,450, marking the highest result on record.

The national benchmark housing price was up by 2.9% – it’s the largest monthly increase since 2005. The number of properties put up for sale was down by 11%, CREA says. As home sales rose by 1% last month, the ratio of sales to new listings skyrocketed to 89%, which is the second largest number on record.

“As we’ve expected, January was quite weak in terms of the new listings, and this year’s first strong new supply numbers will hardly appear until the weather gets warmer,” – Cliff Stevenson, the real estate board’s chair, noted. “The main question is whether the demand will exceed the supply just like last spring, or maybe we may see the re-emergence of some potential sellers who have been waiting for the previous 2 years.”

Canada has faced a historically low number of listings after the COVID-19 pandemic drove the market into a record frenzy during the previous 2 years. As a result, governments were trying to find the way to increase the housing supply, even as specialists expect the market’s imbalance to remain for years.

Last month, Canada had only 1.6 months of housing stock nationwide, marking the second lowest level on record.

“The perfect situation for the next few months would be a huge wave of sellers entering the market and willing to sell this spring”, – says Shaun Cathcart, the real estate board’s senior economist.