Insane housing activity in Canada leads to the lowest market supply on record
An unusual real estate buying activity has led Canada to the lowest number of properties for sale in at least 25 years.
According to the recent report by the Canadian Real Estate Association (CREA), there were only about 86,000 houses left for sale at the end of the previous month on a seasonally-adjusted basis. This number follows record 667,000 home sales reported during 2021 and marks almost a 20% increase from the previous record.
As the supply went down, benchmark home prices were up by 2.5% in December from November and by a record 26.6% from a year earlier.
“Today, there are fewer properties listed for sale in the country than ever,” – Shaun Cathcart, CREA’s senior economist, noted. “That’s why the housing affordability issue we are facing will probably get worse before it gets better.”
The national results follow tendencies seen earlier in January in Canada’s most expensive real estate markets, Toronto and Vancouver, where the supply was down to unprecedented low levels. Such a change intensified views that a national lack of supply supports price gains that have already pushed many working Canadians in the biggest cities out of the market, whether they buy a property or rent it.
This housing crisis is starting to make politicians searching for answers. The benchmark home price in Canada now stands at $811,700.
“Policy makers are beginning to say the right things, but now they have to also start acting in order to change the path we are on,” – Cathcart added. “An aggressive national support for building more properties will address the problem, but it will have to be a larger number of buildings than we have ever seen. Soft measures will not change the trend.”
Meanwhile, the pace of sales is slowing down. The number of home sales almost didn’t change last month compared to November, although it was still enough for the second highest number of sales on record.