What's happening in the Canada housing market?

New figures from CREA reveal how it is heating up

What's happening in the Canada housing market?

Winter may be coming, but Canada’s housing market is heating up as home sales across the country jumped by almost 9% in October.

The latest figures from the Canadian Real Estate Association (CREA) found that home sales increased by 8.6% month-on-month in October 2021 – the largest month-over-month increase since July 2020.

Read more: Home sales dip, but prices still higher than last year – CREA

Additionally, the non-seasonally adjusted national average home price was $716,585 in October 2021, up 18.2% from the same month last year.

Cliff Stevenson, chair of CREA, said that October’s numbers suggest that the housing market may be moving back towards the frenzied activity seen in spring, after a summer “where it looked like housing markets might be calming down a bit.”

“That said, one month of data is not a trend, so we’ll be watching how the balance of this memorable year plays out closely,” said Stevenson.

Meanwhile, Shaun Cathcart, senior economist at CREA, said that the figures show that 2021 “continues to surprise.”

“Sales beat last year’s annual record by about Thanksgiving weekend so that was always a lock, but I don’t think too many observers would have guessed the monthly trend would be moving up again heading into 2022,” said Cathcart. “A month with more new listings is what allows for more sales because those listings are mostly all still getting gobbled up; however, with demand that strong, the supply of homes for sale at any given point in time continues to shrink. It is at its lowest point on record right now, which is why it’s not surprising prices are also re-accelerating. We need to build more housing.”

“No surprise here,” said Robert Kavcic, director and senior economist at BMO. “The market is still drum tight, and demand is still feasting thanks to low mortgage rates, a strong job market, expectations of continued price gains, and probably some additional activity ahead of mortgage rate hikes.”