Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Canadian home sales and prices reached the highest in at least four decades as Covid-19 restriction rollbacks unleashed pent-up demand. Along with a surge in new home construction, housing data suggest overheated conditions seen before the pandemic are returning.
The number of home transactions rose 26% to 53,085 on the month, and were up 31% from a year earlier, the Canadian Real Estate Association said Monday from Ottawa. The average sales price jumped 14% to CAD571,500 from a year earlier, and a monthly price index that compares sales of the same types of houses rose 2.3%, the second highest pace in the last 15 years.
"A big part of what we're seeing right now is the snap back in activity that would have otherwise happened earlier this year," said Shaun Cathcart, CREA's Senior Economist, wrote in a report.
The pandemic is still curbing the supply of houses for sale even as some realtors switch to online showings and provide other social distancing measures. The 2.8 months of inventory is a record low and in some parts of Ontario the supply has shrunk to just a few weeks of expected sales, even as new listings rose 7.6% in July to the highest level ever for that month.
ss
Sales jumped 50% around Toronto, Canada's biggest city, and by 44% in Vancouver. Those two markets had been the focus of policymakers' concern before the pandemic on signs that bidding wars and high prices were pushing some families in to dangerous levels of debt.
The housing market faces new risks in the next few months when six-month mortgage deferments sought by almost 1 million Canadians during the pandemic ends. It's also unclear how many families will still suffer from today's near-record unemployment when they have to start making monthly payments again.
Housing starts are also booming again, reaching the highest pace since November 2017. At that time governments were clamping down with regulations to ensure speculators weren't driving the market up too fast as annual price gains in Vancouver and Toronto topped 30%.
Still, the return of housing as the strongest part of Canada's economy suggests families won't run into the problem of pressure to sell their property as discounted prices to cover any troubles they have repaying their debts.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.