Real estate sales were down by 0.7% last month

In October, Canadian housing sales showed the first decline since April, as the increased activity of recent months started disappearing.

According to the Canadian Real Estate Association (CREA), national homes sales fell by 0.7% from September. Benchmark prices were up by 1% during the same period, leading to a 7% growth since April.

As you know, Canada’s real estate market showed a strong activity in summer due to record-low interest rates, pushing prices and sales to record highs levels. However, the latest numbers show signs of a slowdown, despite still tight market conditions, with only 2.5 months of inventory.

Although home sales were down at the start of the pandemic, they were significantly up ever since. Last month, 56,186 homes were sold, bringing the total result for 2020 to 461,818 and marking the second-busiest 10-month period on record.

Home sales and prices kept rising. The average price of a resale home sold through MLS system rose to $607,250, marking a 15.2% annual increase. Six provinces showed double digit increases, and Manitoba followed with 9.6%.

Following the tendency that has started when the pandemic began, homebuyers are opting for more space and larger properties outside the big cities.

“The real price strength is seen in markets outside of the largest urban centres,” – noted BMO economist Robert Kavcic.

Several markets across southwestern Ontario are reporting annual hikes of more than 20%.

“At the same time, while the large cities still show price increases, they are losing their positions. For instance, Vancouver is underperforming the Okanagan Valley, and Toronto is now underperforming Georgian Bay, Barrie and London/St. Thomas.”

According to TD Bank economist Rishi Sondhi, the volume of sales slowed by 0.7% last month from September, and it could mean that a strong demand caused by the pandemic is disappearing.

“Sales are expected to remain above fundamentally-supported levels, but it cant’s last for long,” – Sondhi noted. “That’s why we predict a weaker activity in coming months. And the possibility of more lockdowns may increase a downward pressure on sales.”

 

 

 

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