MNI DATA IMPACT: Canada Jan Home Prices Rise Most Since 1989

Canadian home prices rose the most since 1989 in January as the Covid-19 pandemic drove new listings to a record low, realtor figures showed Tuesday, returning some focus to the prospect of an unbalanced economic expansion reliant on consumer debt.

The average resale price rose 22.8% from a year ago to CAD621,525, Canadian Real Estate Association spokesman Pierre Leduc said Tuesday. On a monthly basis, sales rose 2% to a record 61,371 units, new listings dropped 13% and prices gained 4.7%. Home prices have climbed from about CAD400,000 since the start of 2015.

The inventory of homes for sale was a record low 1.9 months in January, and 35 markets in the province of Ontario had readings of less than one month. Sales to new listings reached 90.7%, shattering the prior record of 81.5% set 19 years ago, and the historical average of 54.3%.

The strains on supply may ease as restrictions imposed again during the pandemic's second wave are relaxed, CREA Chair Costa Poulopoulos said in a report.

The group's price index adjusted to match up sales of comparable homes rose 13.5% from a year earlier, the fastest since June 2017. Some of the more modest price gains were in Toronto and Vancouver, already expensive markets whose gains in the last decade drew warnings from the Bank of Canada and tougher regulations to avoid speculation from federal and local governments.