Much has been said about the resilience of the Canadian housing market in 2020.
The market adapted and rebounded from the challenges of lockdown and economic fears to reflect a strong desire for homeownership among Canadians, aided by low interest rates unlikely to be rising in the near term.
The latest data from the Canadian Real Estate Association, released Monday, shows that sales remained strong in October, although edging back slightly from the previous month.The 0.7% decline month-over-month followed September’s record high.
Actual (not seasonally adjusted) activity was up 32.1% year-over-year and was a new record.
Larger markets posting sales gains included Montreal, the Fraser Valley, Calgary, and Edmonton. However, the Greater Toronto Area (GTA), Hamilton-Burlington, Ottawa, and Greater Vancouver all posted a reduction in sales.
The MLS Home Price Index rose 1% m-o-m and was up 10.9% y-o-y.
“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.”Part of the strong demand can be explained by those who are choosing to move to new – and likely less populated – areas as a result of the pandemic.
Rental market concerns
While sales remain strong, there are concerns for real estate investors in the rental market.
A report from Rentals.ca shows that the average asking rent across Canada is down by an average 8% year-over-year with most major markets seeing a decline.
There has been a sizeable drop in average rents in Toronto with a one-bedroom apartment down 17% at $1,922 and a two-bed down 14% to $2,531.
“We continue to see an increase in listings nationally, which tells us that supply is outpacing demand,” Matt Danison, CEO of Rentals.ca told HuffPost Canada. “This market imbalance suggests soft rental market conditions will continue for the rest of the year.”