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Surge in house prices continues as 2020 set to be record-breaking year for sales

The number of homes sold in November fell slightly compared to October but overall market activity in Canada was a third higher than in 2019, new data show.

Average prices, too, were up 13.8% compared to November 2019, the Canadian Real Estate Association (CREA) figures reveal.

National sales dropped 1.6% month-over-month in November, while the number of newly listed properties likewise fell 1.6%.

But monthly activity is “still running well above most of history,” according to a CREA analysis of the data.

<who> Photo credit: CREA

Actual – not seasonally adjusted – sales were up 32.1% year-on-year.

“Many Canadian housing markets continue to see historically strong levels of activity, so much so that a new annual sales record this year is looking more likely every day,” said Costa Poulopoulos, chair of CREA.

CREA’s senior economist, Shaun Cathcart, said 2020 looks like a record-breaking year.

“If I had to sum up the Canadian housing story in 2020, I would say it’s gone from weakness because of COVID to strength despite COVID,” he explained.

<who> Photo credit: CREA

“It will be a photo finish, but it’s looking like 2020 will be a record year for home sales in Canada despite historically low supply. We’re almost in 2021, and market conditions nationally are the tightest they have ever been and sales activity continues to set records.”

He added: “Much like this virus, I don’t see it all turning into a pumpkin on New Year’s Eve, but at least vaccination is a light at the end of the tunnel. Immigration and population growth will ramp back up, mortgage rates are expected to continue to remain very low, and a place to call home is more important than ever.

“On top of that, the COVID-related shake-up to so much of daily life will likely continue to result in more people choosing to pull up stakes and move around. If anything, our forecast for another annual sales record in 2021 may be on the low side.”

The national average home price was just over $603,000 in November 2020, according to CREA.

<who> Photo credit: NowMedia

CREA’s forecast for 2021, meanwhile, is that the housing market will remain “relatively healthy” – for sellers, at least.

Prices will either continue to climb or remain steady, consolidating the extraordinary inflation of 2020.

“Over the past several years, record levels of international immigration, low interest rates and an increasing share of millennials entering their home buying years have helped make the housing market a significant source of strength for the Canadian economy,” CREA explained.

“The recent government support programs for individuals and businesses have also helped the overall economy through the most severe parts of the pandemic to date.”

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