Canada

The Canadian Real Estate Industry Just Downplayed The Biggest October In 10 Years

Canadian real estate markets are on fire. Canadian Real Estate Association (CREA) data shows sales across the country jumped in October. The rise was actually so large, last month was the biggest for the industry in over a decade. This is the opposite of what the government wants to see ahead of rolling out new demand stimulus.

Canadian Real Estate Sales Rise Over 12%

The headline number used by the industry is seasonally adjusted, which downplayed growth. There was 42,970 seasonally adjusted sales in October, flat from a month before. Unadjusted however, sales reached 44,499 in October, up 12.9% from the same month last year. FYI seasonally adjusted numbers are compared using consecutive periods. Unadjusted numbers are compared on a year-over-year basis.

Canadian Real Estate Sales

The unadjusted sales for all home types, as reported through the Canadian MLS.

Source: CREA, Better Dwelling.

The growth rate is very high, and this is also a new record. The 12-month growth is the highest for October since 2011. The number of sales reported for the month is also the highest since 2007. Some of this is delayed demand from last year’s weak numbers, but it’s still a very large month.

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.

British Columbia’s Largest Markets Lead In Growth

The largest growth was in last year’s biggest losers – Vancouver and Fraser Valley. Vancouver reported 2,892 sales in October, up 45% from the same month last year – the biggest jump in the country. Fraser Valley, the neighboring board, followed with 1,500 sales, up 36% from last year. In a distant third was Ottawa at 707 sales, up 25.4% from last year. Both BC markets were near multi-year lows last year, so the jump was a little expected.

Canadian Real Estate Sales By Market

Canadian real estate sales in markets with more than 450 sales in the month.

Source: CREA, Better Dwelling.

Biggest Losses Were In… Wait, There Was None

That’s right kiddos, not one major market showed a loss from last year. Kitchener-Waterloo showed the smallest gain at 502 sales in October, up 2.7% from last year. London follows with 924 sales, up 2.8% from last year. Victoria came in third with 586 sales, up 5.4% from last year.

Canadian Real Estate Sales Change By Market

The percent change in Canadian real estate sales, in markets with more than 450 sales in the month.

Source: CREA, Better Dwelling.

All of Canada’s largest real estate markets pumped out massive gains. Curiously, the rise in sales is not isolated to “hot regions,” it’s a broad market gain. This implies a more macro change to buyer pressure.

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13 Comments

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  • Marc 4 weeks ago

    Obviously they need the government to give them the fat deposit assistance still, so they’re not talking it up. That 5% increase using taxpayer money isn’t going to pay for itself.

    • carlton 4 weeks ago

      Can we please normalize rates now? its obvious the market doesn’t anymore stimulus.

  • Mike 4 weeks ago

    There must be more to this, I’m up for renewal and am being offered rates of as low as 2.34 if I commit to a 5 year fixed term. I’m sure the banks had this data before it appeared here. Why lower borrowing rates if everything is so hot.

    • Kathleen Thomson 4 weeks ago

      BOC was absorbing liquidity, preventing an increase in rates. Not sure if they’re going to do it into the next round, but they’ve essentially opened up the technicals for a QE-style move. Since CAD doesn’t have the demand the USD does, this has the potential to be very, very bad for Canadian investment.

    • Brad 4 weeks ago

      @Mike fixed rates are completely based on the bond market and have nothing to do with the fed rate… the bank of Canada only has control of variable rates.

      I’m not sure if you know how it works but the bank’s aren’t lending you their money, and they control a few basis points on the rate. For fixed rates they are using the bond market to get you the money, variable they borrow from the fed. It’s why they can never lose.

  • Rana 4 weeks ago

    U mean drop the stress test

    • Trevor 4 weeks ago

      I think they mean the first-time buyer plan that’s suppose to support entry level homes at almost a million dollars. It’s lunacy, that the government is pouring gas on the fire of condos that cost double what you would pay in NYC.

  • Jay 4 weeks ago

    And how many of these sales were to Chinese or Hong Kong buyers? The timing coincides with the situation in HK getting worse. Nice fluff piece though, how many do you own?

    • Trevor 4 weeks ago

      No significant increase, it’s Realtor fluff being passed around BC. There isn’t even an uptick of inventory in Hong Kong.

  • Brad 4 weeks ago

    It’s even crazier when you look at markets with the smallest increases (i.e. KW) and realize that they were beyond supply constrained or they would have grown considerably more.

  • straw walker 4 weeks ago

    Why are sales up in Vancouver? The simple answer is there are a lot of speculative houses that have to sell,,and these houses are being priced to sell.
    Houses that were bought after mid 2015 are all under water, many have secondary mortgages ( not chartered bank mortgages) that only require interest only payments. These owners are now running out of cash as these houses all have negative cash flows.. The market has not corrected in price, so these houses have to sell.
    And this trend will likely continue at an even more accelerated pace,,

  • Jackychan 4 weeks ago

    Is it so obvious that sales volume is not the only important metric? This is an utterly incomplete picture.

    Need to understand why did sales volumes changes, driven by higher demand (and higher prices) or sellers accepting price reductions to get out of properties.

    The later might suggest continued downtrend in prices as other sellers become worried of going under-water. All this might spike sales volume, although the market itself might be tanking.

    Just a thought

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