Although the average selling price in April rose by nearly half from the low point at the beginning of the pandemic, Canada’s hot real estate market showed little signs of cooling in April.
The Canadian Real Estate Association said on Monday that the number of homes sold in April fell by 12.5% ??from the previous month’s level, which was the busiest month ever for real estate agents.
The organization representing Canadian real estate agents stated that sales in all markets across the country fell by 85%, including almost everywhere in Ontario and British Columbia.
CREA Chairman Cliff Stevenson said: “Although Canada’s housing market is still very active, there is growing evidence that some of the extreme imbalances of last year are gradually being eliminated. This is what everyone hopes. See things.”
Due to the COVID-19 pandemic, real estate has been adding fuel to the fire over the past year Push interest rates to record lows. Coupled with the delays for Canadians for several months, this makes buyers willing to pay everything for the house they want.
The housing market usually follows a seasonal pattern, slowly growing from the beginning of the year, and then heating up as the weather improves. By the end of the summer, as the school year began, sales tended to slow down, and then cooled again to the end of the year.
However, the COVID-19 pandemic that began in March 2020 has made these trends no longer visible. Sales plummeted in March 2020 and April 2020, and then exploded from May.
In any other year, April sales will be higher than March, but March 2021 is the busiest month on record. TD Bank economist Rishi Sondhi said that the slowdown in April may therefore mark a change in direction or be a short-lived signal.
“More months of information are needed to assess whether the market still has a certain upward momentum, or whether the activity is indeed cooling. However, the recent situation continues, and we expect that as interest increases, sales will tend to decline in the second half of the year. Rates and stricter stress testing regulations are starting to attract people’s attention,” he said. “This will also reduce the motivation for price increases.”
Although the number of home sales is slowing down, the price increase is still eye-opening. The average price of Canadian homes sold in April was 696,000 Canadian dollars, an increase of 41.9% over the same period last year.
CREA said the average price can be misleading because it is affected by sales in big markets such as Toronto and Vancouver. Therefore, it has launched another figure called the House Price Index, which is adjusted for different markets and housing types.
However, even if HPI increased by 23.1%, it was the highest annual increase since 2005.
Bank of Montreal economist Robert Kavcic said the April figures still portray a booming real estate market. He said: “Even if it drops from record levels, demand is very strong.”
“Although we may have seen peak momentum, this market is still very strong across geographies and market segments. There is still a long way to go from the moon.”
