The latest report from the Canadian Real Estate Association shows Canada home sales setting a new record in September, with the national average home price hitting $604,000.
The report shows that actual sales also broke records for the month of September. With an additional 20,000 transactions on top of previous records, national home sales saw 0.9 percent growth in a month-over-month comparison.
“Many Canadian housing markets are continuing to see historically strong levels of activity as we enter into the fall market of this very strange year,” said CREA Chair Costa Poulopoulos. “Along with historic supply shortages in a number of regions, fierce competition among buyers has been putting upward pressure on home prices.”
Shaun Cathcart, the senior economist of CREA, attributed this continuous growth in home prices to pent-up demand since the lockdown, with government support and ultra-low interest rates.
“Another wildcard factor to consider, which has no historical precedent, is the value of one’s home during this time. Home has been our workplace, our kids’ schools, the gym, the park and more. Personal space is more important than ever,” said Cathcart.
However, once the pent-up energy in Canada’s housing bubble dissipates, home prices may tumble in the coming months, according to another report by Moody’s Analytics, Inc.
“The housing market’s vigor will fade as high unemployment and lower incomes will restrain buyers’ return to the market,” said Moody’s report. “All regions will experience price declines, but the Prairie provinces will register the most sizable peak-to-trough decline.”