Canadian real estate data confirms the anecdotes — the market was busier than ever. Canadian Real Estate Association (CREA) sales reached a new all-time high in March. The record is for any month of home sales, not just for the time of year. Annual growth was also the highest ever, beating even annual growth in 2009.
Canadian Real Estate Sales Hit A Record High
Canadian real estate sales printed a whack of records, but the key is volume and growth. CREA reported 69,421 seasonally adjusted sales in March, up 5.2% from a month before. Unadjusted, home sales came in at a mind-blowing 76,259 sales in March, up 76.2% from the same month a year before. This an all-time high for any month, and as you can see — this isn’t just a pandemic-related skew.
Canadian Real Estate SalesThe unadjusted sales for all home types, as reported through the Canadian MLS. Source: CREA; Better Dwelling.
Canadian Home Sales Increased 76%
The rate of growth reached a record high as well, with nothing like this since the Great Recession. The 76.2% unadjusted 12-month increase in March is the highest for any month since 2009. CREA points out this is skewed higher due to the lockdown that impacted the last week of March 2020. However, last March wasn’t as slow as many think it was — as you can see above.
Canadian Real Estate Sales ChangeThe annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS. Source: CREA; Better Dwelling.
BMO chief economist Douglas Porter said, “You don’t like the comparison to a year ago, because that marked the start of the shutdowns? Okay, sales last month were more than 80% above the March 2019 level.”
April home sales will be subject to a significant low-base effect. This is when an unusually small number in the previous period is compared to a strong number in the current one. The effect makes growth look like it’s picking up steam, even if the locomotive is still parked. Small growth can look astronomical in these situations.
May home sales should reflect this trend as well. By June, some tapering should begin to show. In 2020, home sales were very strong in the second half of the year. This will have the opposite effect we’re currently seeing, as 2021 gets closer to the end of the year. Even if home sales don’t cool.
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Home sales add a lot GDP. What happens when this tapers like they said it would? Slow ass growth. But what do they replace it with?
It’s not Productive GDP it is debt GDP. If too much debt is created for mortgages it is debt that doesn’t create jobs. If the debt created is for business’s and factories that creates more GDP to pay off the debts.
Everything looks good now but down the road home values will be cut in half eventually and people egos will be shattered. This lazy fu&^5 buying up real estate that should be for poor families and selling it back to the people at inflated rates deserve it.
Home sales & Oil represent 20% of Canada’s GDP. If home sales tumble in price (average price is $450k USD) then Canada’s economy will go down with it. There’s too many people in Canada and Canada’s economy produces nothing that the rest of the world needs.
Listings are up 50%. Market will hopefully cool soon. I’m seeing a lot of “reduced price” on homes but still, properties are way overvalued.
Look, if the pandemic didn’t drop proces nothing will. The biggest mistake the government made was to prop up prices by giving blanket mortgage deferrals. They should have only give mortgage deferrals to those who only own one home.
Now the entire world printed extreme amount of money AND over million wealthy immigrants are coming. You expect prices to drop??? The government should have forced speculators who own multiple homes to sell during the pandemic. There is nothing they can do now.
The obvious solution is to ban foreign home ownership. They won’t because Canada’s economy will collapse.
Then living standards will just stagnate or decline depending on the mix of immigrants and how much healthcare and other govt transfer payments they consume.
I actually think there is no plan whatsoever for the country at this point to get back to a good future.
It’s called, GREED, GREED F ing GREED !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
This announcement from the other day will help proliferate the real estate insanity for a while longer:
“OTTAWA — Ottawa is creating a new pathway to permanent residency for 90,000 essential workers and international graduates who are currently in Canada, Immigration Minister Marco Mendicino said Wednesday.
The new policy will grant permanent status to temporary workers and graduates who possess the skills and experience the country needs to fight the COVID-19 pandemic and achieve an economic recovery, Mendicino said.”
This was an act of desperation by govt. to meet the aggregate numbers no matter what. Back in Jan they dropped the scores to 75 so everyone in CEC pool becomes eligible, again to make up the numbers because a whole lot of real estate is dependent on the perception that 400k immigrants are coming, whereas these people are already in Canada and not a net addition to population.
People need to think about composition of the immigrants and not blindly make decisions based on aggregate numbers.
Will “Universal Income” be universal, ie everyone gets it? Or just those that don’t want to work?
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