October home sales set record, edge back from September high

Home sales in October set a record for the month, even as sales fell back from the all-time monthly high set in September, the Canadian Real Estate Association (CREA) said on Monday.

The association said October sales were down 0.7% from September.

However, sales last month still set a record for October as they gained 32.1% compared with October last year.

The national average home price also set an October record at $607,250, up 15.2% from the same month last year. Excluding sales in Greater Vancouver and the Greater Toronto Area — two of the most active and expensive housing markets — lowers the national average price by more than $127,000, CREA said.

The housing market has been playing catch-up this summer and fall from Covid-19 shutdowns that dampened the usually busy spring housing market. Shaun Cathcart, CREA’s senior economist, said that realtors may also be seeing a lot of moves, or “churn in the market,” that would not have happened if not for Covid-19.

“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,” said Cathcart.

“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.”

The association noted that some 461,818 homes were sold over Canadian MLS systems in the first 10 months of the year, up 8.6% from the same period in 2019.

Two areas with big price surges during October were Ontario’s Quinte & District Association of Realtors — including Prince Edward and Belleville, Ont. — and the Woodstock and Ingersoll Real Estate Board in southwestern Ontario.

Close behind were markets such as Ottawa, London, Barrie, Hamilton, Niagara, Guelph, and Kitchener, as well as what CREA dubbed “Ontario cottage country areas.”

Canadian housing markets with slower price growth in October included Victoria and elsewhere on Vancouver Island, St. John’s, Calgary and Edmonton, CREA said.

The number of new listings rose 2.9% in October to a new record for the month, but still fell short of the pace of sales growth. CREA said the housing market remains “very tight” in many parts of the country, with a new low of 2.5 months of housing inventory now on the market.

“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 Cathcart.