Another record month for Canadian housing market

Only 1.9 months of inventory on a national basis at the end of January 2021 – the lowest reading on record for this measure

Canadian MLS residential sales set another new all-time record in January, according to data released Tuesday by the Canadian Real Estate Association.

The association said there were 36,897 sales for the month – 35.2 per cent year-over-year gain. In line with activity since last summer, it was a new record for the month of January by a considerable margin. For the seventh straight month, sales activity was up in almost all Canadian housing markets compared to the same month the previous year, explained CREA.

“Sales will be hard pressed to maintain current activity levels in the busier months to come absent a surge of much-needed new supply; although, that could materialize as current COVID-19 restrictions are increasingly eased and the weather starts to improve,” it said.

“2021 started off just like 2020 ended, with a number of key housing market indicators continuing to set records,” said Costa Poulopoulos, Chair of CREA. “The two big challenges facing housing markets this year are the same ones we were facing last year – COVID and a lack of supply. It’s looking like our collective efforts to bring those COVID cases down over the last month and a half are working. With luck, some potential sellers who balked at wading into the market last year will feel more comfortable listing this year.”

“The problem with this time of year is that the buyers and sellers that will in time define the Canadian housing story of 2021 are mostly all still waiting in the wings,” said Shaun Cathcart, CREA’s Senior Economist. “It’s the dead of winter and we’re only just starting to get the second wave of COVID under control. We’re unlikely to see a rush of listings until the weather and public health situations improve, and we won’t see buyers until those homes come up for sale. 

“The best case scenario would be if we see a lot of sellers who were gun-shy to engage in the market last year making a move this year. A big surge in supply is what so many markets really need this year to get people into the homes they want, and to keep prices from accelerating any more than they already are.”

CREA said there were only 1.9 months of inventory on a national basis at the end of January 2021 – the lowest reading on record for this measure. 

The Aggregate Composite MLS Home Price Index rose by 1.9 per cent month-over-month in January 2021. It was up 13.5 per cent from a year ago – the biggest gain since June 2017.

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