CREA Says October Home Sales Edged Back From Record High Set in September
Statistics released on November 16 by the Canadian Real Estate Association (CREA) show national home sales continued running at historically strong levels in October 2020. Summary statistics include:
- National home sales edged back 0.7% on a month-over-month (m-o-m) basis in October.
- Actual (not seasonally adjusted) activity was up 32.1% year-over-year (y-o-y).
- The number of newly listed properties rose 2.9% from September to October.
- The MLS® Home Price Index (HPI) rose 1% m-o-m and was up 10.9% y-o-y.
- The actual (not seasonally adjusted) national average sale price posted a 15.2% y-o-y gain in October.
- There were just 2.5 months of inventory on a national basis at the end of October 2020 – the lowest reading on record for this measure.
“For anyone waiting for the Canadian existing home market to begin to settle down following this summer’s surprisingly strong recovery, they’re going to have to wait a little longer. It was evident that the same trends we’ve been seeing since July – record sales and record prices amid tight overall supply – was once again the story in October,” said Shaun Cathcart, CREA’s Senior Economist.
“As we’ve moved through the last few months of headline-grabbing data, we’ve seen sales activity for the year-to-date not just catch up with last year, which was surprising enough, but at this point activity in 2020 has a real shot at setting an annual record. Many reasons have been suggested for why this is when many traditional drivers of the market, economic growth, employment and confidence in particular, are currently so weak. Something worth considering is how many households are choosing to pull up stakes and move as a result of COVID-19 and all the associated changes to our lives. We could be seeing a lot of moves, or churn in the market, that would not have happened in a non-COVID world.”
Two areas with big price surges during October were the Quinte and District area – including Prince Edward County and Belleville, Ont. – and the Woodstock and Ingersoll region in southwestern Ontario. Close behind were markets such as Ottawa, London, Barrie, Hamilton, Niagara, Guelph and Kitchener, as well as Ontario’s cottage country.
“Pent-up demand might be running its course now, but there’s still a fundamental shift in preferences toward larger properties outside of core urban areas, greased by record-low mortgage rates,” wrote Robert Kavcic, senior economist at BMO Capital Markets Economic Research, in a note to clients. “And, when there’s not much to choose from, prices lurch higher.”
CMHC Says Annual Pace of Housing Starts Climbed Higher in October
Canada Mortgage and Housing Corp. says the annual pace of housing starts increased in October. The national housing agency says the seasonally adjusted annual rate of housing starts rose to 214,875 units last month compared with 208,715 in September. Economists surveyed by financial data firm Refinitiv had on average expected an annual rate of 222,000.
“The national trend in housing starts increased in October following a pause in September,” said Bob Dugan, CMHC’s chief economist. “Higher single-detached SAAR starts in October drove the overall trend higher, offsetting a second consecutive decline in monthly multi-family SAAR starts. Single-detached starts trended higher in several major centres, including Toronto and Montréal.”
The overall increase came as the annual rate of urban starts rose 3.5 % in October to 202,584 units. The pace of urban starts of apartments, condos and other types of multiple-unit housing projects edged down 0.2 per cent to 144,796, while urban starts of single-detached homes rose by 14.3% to 57,788. Rural starts were estimated at a seasonally adjusted annual rate of 12,291 units.
The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 222,734 in October, up from 214,372 in September.