The housing market in Canada posted the strongest increase in home sales since the onslaught of the pandemic.
Home Sales Surged +8.6% m/m in Canada
The Canadian housing market came back to life in October. Home sales surged +8.6% m/m posting the second-best October sales numbers on record. Benchmark prices for homes jumped +2.7% m/m.
October’s +8.6% increase in home sales represented the biggest jump in home sales since Canada was emerging from its first pandemic lockdown in July 2020, according to data released by the Canadian Real Estate Board (CREB).
Cliff Stevenson, chair of the CREB), said, “After a summer where it looked like housing markets might be calming down a bit, October’s numbers suggest we might be moving back towards what we saw this spring, with regards to current market demand and supply conditions.
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Pandemic-Inspired Imbalance in Housing Supply and Demand
During the COVID pandemic, consumers flocked to bigger living spaces with the effect of historically depleting housing supply. The result of this supply-demand imbalance rendered the Canadian housing market one of the hottest in the world. In fact, sizzling hot home prices associated with sizzling hot demand made deteriorating affordability a top political issue during Canada’s recent election cycle for the top spot of prime minister.
The now second-term Prime Minister Justin Trudeau promised to address Canada’s continuing housing supply shortage while campaigning for re-election. but much of the power over housing policies rests with local governments. (Trudeau’s campaign promise was to halt international investment in residential housing for two years as a way to curtain both skyrocketing home prices and competition from non-Canadians in bidding wars.)
However, much of the power over housing policies in Canada rests with local governments. We’ll see what, if anything, Trudeau can actually do to put a dent in deteriorating housing affordability.
New Listings Up Slightly in October
New listings climbed +3.2% during October while unrelenting buyer demand continued. Canada had only 1.9 months of inventory available, according to CREB data, close to the all-time lows the market hit when the country’s housing market was at its hottest earlier this year.
Thanks to the Canadian Real Estate Board and Bloomberg.