Canadian real estate sales printed yet another record during the pandemic. Canadian Real Estate Association (CREA) data shows home sales in January 2021 hit a record. The new high for January sales came with a little slow down for growth. However, things have been so heated, even a double digit drop in growth is one of the fastest rates in history.
Canadian Real Estate Sales Hit Record For January
Canadian real estate hit a new all-time record number of sales last month. There were 36,897 unadjusted sales on the MLS in January, up 35.2% from the same month as the year before. Seasonally adjusted, that number is 61,371, up 2.0% from a month before. The unadjusted number is a record for any January. During a pandemic.
Canadian Real Estate SalesThe unadjusted sales for all home types, as reported through the Canadian MLS. Source: CREA, Better Dwelling.
Canadian Real Estate Sales See Growth Slow, But Still At 35%
The numbers are getting so big, it’s going to be hard to scale sales from here. Last month’s 35.2% year-over-year change is a lot smaller than the 47.2% seen in December. That wasn’t entirely unexpected. One month lower doesn’t make a trend though, even if it’s a 12 point drop. Only 8 months in the past two decades have seen larger 12-month growth. Of those, 6 of them were the year before the Great Recession.
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.
Canadian Real Estate Sales More Than Just Pent-Up Demand
The pandemic created restrictions on sales activity, which pushed sales into later quarters. By averaging the sales, we can smooth some of the months where home sales were artificially low. The 12-month rolling average is still 46,506 for January, up 13.9% from a year before. This is a record high, even when the trough is smoothed. This is more than just pent-up demand. It’s also pulled forward demand, commonly attributed to record low mortgage rates.
Canadian Real Estate Sales: Rolling AverageThe 12-month rolling average of Canadian real estate sales. Source: CREA, Better Dwelling.
The growth rate of sales is expected to slow after the pandemic’s forced trough that ended in June. The Bank of Canada (BoC), as well as other organizations, have forecast sales will soften in the coming months. They believe cheap money has motivated more detached home sales as a temporary trend. As the effect of cheap money fades, they see less buying. The BoC did also quietly take their foot off the gas for cheap money, which should help with the fade.
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