First National Financial LP

Residential Market Commentary - Autumn chill does not cool hot market

  • First National Financial LP

The Canadian home market remains robust as pent-up demand from the spring continued to unwind into the fall.

The November numbers from the Canadian Real Estate Association show sales hit another new monthly record, up 32.1% compared to a year ago.  Month-over-month, sales slipped a modest 1.6% from October.

The national average price for a home has now topped $603,000, a 13.8% increase from last November.  Of course, the two busiest and most expensive markets in the country – Toronto and Vancouver – continue to skew that figure.  When they are taken out of the calculation the national average price drops to about $481,000.

A key component in the Toronto and Vancouver markets is showing a marked slowdown.  Downtown condos have seen a sharp decrease in price acceleration.  While single, detached homes and other ground-oriented housing experienced a 14.1% increase, condos rose 4.9%.

CREA expects to see Canada’s national average home price rise by another 9% in 2021, to more than $620,000. 

The realtors say tight supply is driving prices.  New listings were down by 1.6% in November holding the sales-to-new listings ratio at 74.8%.  That is one of the highest levels ever recorded for the metric.  The long-term average sales-to-new listings ratio is 54.2%.

There were just 2.4 months of inventory on a national basis at the end of November 2020 – the lowest reading on record for this measure.