You may not be able to eat inside of restaurants, but tens of thousands of Canadians are home shopping. Canadian Real Estate Association (CREA) data shows real estate sales jumped to a multi-year high for June. The rise in sales may just be previous months of buyers catching up though. CREA’s chief economist warned the industry to remain cautiously optimistic, as this rally could fade in the coming months.
Canadian Real Estate Sales Are Up Over 15%
Canadian real estate sales are up significantly, both on the month and from last year. CREA reported 41,628 seasonally adjusted sales in June, up 63.0% from a month before. There were 54,928 unadjusted sales in June, up 15.2% from the same month last year. Anyway you cut this number, it’s a significant bump in sales.
Canadian Real Estate Sales
The unadjusted sales for all home types, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
There’s not a lot to take away from the actual year-over-year growth trend. The 15.2% year-over-year increase for June might look like boom-time growth is back. However, the sales volume for April and May combined were down 48.0% from last year. It’s probably safe to assume the lockdown didn’t cause all of these missing buyers to reconsider. Instead, those buyers in the market likely delayed their purchase during the lockdown. Whether the perceived jump is enough to stir up a little FOMO and carry momentum forward is up for debate. However, it’s more likely we’ll see growth slow as these buyers catch up.
Canadian Real Estate Sales Change
The annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
For June, this number is higher than we’ve seen over the past couple of years. Last year and the year before were unusually slow, with some of CREA’s biggest markets seeing multi-year lows. The reported 54,928 sales is higher than those years, but not quite at the same volume as seen during the 2015-2016 breakout that sent volumes to record highs.
March Canadian Real Estate Sales
The number of sales reported through the Canadian MLS in the month of June.
Source: CREA, Better Dwelling.
Quebec And BC Real Estate See Biggest Gains
The biggest gains were in Quebec and BC, with the latter an easy beat since they were coming off multi-year lows. Quebec City saw the biggest growth with 924 sales in June, up 46.9% from the same month last year. Fraser Valley followed with 1,619 sales, up 30.1% from last year. Vancouver came in third with 2,497 sales, up 19.0% from a year before. Both Fraser Valley and Vancouver were coming off of unusually slow sales volumes, so the big pop isn’t surprising. Quebec City on the other hand, has beat its sales numbers for at least three years in a row.
Canadian Real Estate Sales By Market
Canadian real estate sales breakdown for selected markets.
Source: CREA, Better Dwelling.
Southern Ontario Real Estate Sees Biggest Drop In The Country
The biggest decline in sales volumes weren’t all that big, but they were all seen in Southern Ontario. Kitchener led with 642 sales in June, down 1.8% from the same month last year. Toronto matched with 8,701 sales, also down 1.8% from last year. Ottawa came in third with 2,083 sales, down 1.2% from last year. Once again, not big – but delayed buyers helped to push that number to where it is.
Canadian Real Estate Sales Change By Market
The percent change in Canadian real estate sales for selected markets.
Source: CREA, Better Dwelling.
The numbers are much higher than last year, but the bump is somewhat deceiving. CREA’s senior economist echoed that sentiment, flat out saying “…we are obviously not back to normal at this point.” Although July is on track to beat last year’s numbers as well, CREA still isn’t optimistic about the second half. It’s an usual time when sales are ripping higher, but hundreds of thousands of Canadians can’t pay their mortgages.
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The government needs to inflate home values, so homeowners can refinance with a little bigger of a cushion. There’s no wage growth, and people have no savings. They’re going to “tax” that cushion from non-homeowners.
Not entirely untrue. Bank of Canada did a calculation on mortgage payments and household heads to come up with the CERB amount. $2,000 wasn’t arbitrary. It’s enough to cover a mortgage at the median rate people are paying, and expenses for a dual income household.
No savings = everyone gets raided for tax dollars.
Year to date sales activity down -11.3%. Yup, the government just poured gasoline on home prices.
There’s going to be a recession that wipes out homeowners due to the inefficiencies the government has created, but this ain’t it. The government’s spending more on “stimulus” than the drop in GDP.
… then telling us we didn’t need it, because the economy is great.
I think the lack of comments speaks volumes. “…we are obviously not back to normal at this point.” Wow. Lets unpack that. What is the definition of normal in this case? Are continuing unhinged/unbridled sales/prices ‘normal’? Nothing about 2020* – the year that put the ‘risk’ in its inevitable asterisk – will ever be ‘normal’.