Housing prices reach another record level in Canada

According to the Canadian Real Estate Association (CREA), February saw an average home price reaching another record level last month – $816,720. It’s 20.6% more than a year earlier. Moreover, it was the second-busiest February in terms of home sales.

Obviously, the hottest markets in Toronto and Vancouver significantly pushed Canada’s average home price up. In case we exclude them from calculation, the number will go down by almost $178,000.

However, CREA’s House Price Index, which avoids influence of the two largest markets, has also reported sharp growth over the year by as much as 29%, marking the fastest pace on record.

Last month, there were over 58,200 homes sold, which is 4.6% more than in January. CREA says it may be caused by a certain rebound in new listings.

The number of homes listed on the market rose by about 23% on a seasonally adjusted basis: from 62,539 to 77,352.

CREA’s recent Resale Housing Market Forecast says the low supply will probably keep challenging the national real estate market this year, as well as the possibility of more rate hikes.

That’s why a significant cooling will hardly happen next year. CREA expects nearly 612,800 home sales via MLS Systems in 2022, which is 8% less than a year earlier, but still considerably more than today’s second-highest annual result.

Home sales may remain “historically strong” next year, but they will start returning to normal levels. “Lack of supply, higher home prices and growing interest rates are expected to reduce market activity and price increases in 2023 compared to 2022, especially in most expensive Canadian markets.”