The average price of a home sold on the Canadian Real Estate Association’s MLS service went for $604,000 in September, an all-time record and an increase of more than 17 per cent in the past year.
The group that represents 130,000 Canadian realtors says that in addition to smashing the previous record on the price side, it was also the busiest September ever in terms of the volume of homes sold, with an additional 20,000 transactions logged on top of the previous record.
Thursday’s numbers are the latest eye-popping figures to come out about Canada’s housing market, which has defied expectations since March.
The pandemic caused home sales to crater in March and April because of widespread lockdowns, but has come out on fire every month since.
Having to spend months locked down in their homes seems to have ignited a desire in buyers for more space, which is why detached properties in suburbs around major cities are driving the gains. “Home has been our workplace, our kids’ schools, the gym, the park and more,” CREA’s chief economist Shaun Cathcart said. “Personal space is more important than ever.”
CREA says its average price is not the best gauge of the market because it is easily skewed by sales of expensive homes in Toronto and Vancouver. The realtor group says if those two cities are stripped out, the average Canadian home sold last month went for $479,000. But that figure has risen by even more than the overall average, up by more that 20 per cent in the past year.
The market has been buoyed by demand for homes and record low interest rates, but economist Doug Porter with Bank of Montreal says despite that, prices will have a tough time continuing their torrid pace, as mortgage payment deferral programs offered by the big banks are slated to expire soon, which could lead to a reckoning.
“We doubt that this recent sizzling strength can persist amid some of the building headwinds, which should at least somewhat tame market conditions in the months ahead,” Porter said. “The underlying economic conditions simply do not support such a piping hot market over a sustained period.”