Last Updated on October 24, 2023 by Neil Sharma
Canada’s housing market set another sales record in February with annual and monthly increases of 39.2% and 6.6%, respectively, according to the latest data from the Canadian Real Estate Association (CREA).
Substantial sales gains in the , which led the monthly sales rise last month, Calgary, and a slew of other Ontario and British Columbia markets offset a sales decline in , which was hampered by a lower level of new listings compared to H2-2020.
“At this point, everyone knows how far the current monthly sales numbers are from historical norms, and that they have been setting record after record for eight months now, so this should not be a surprise like the weak numbers posted last spring were,” Costa Poulopoulos, chair of CREA, said in a release. “The two big challenges that continue facing Canadian housing markets are the same ones we’ve been facing for months—COVID-19 and a lack of supply. With luck, potential sellers will feel more comfortable listing their homes in the short term.”
According to the CREA data, new listings rose by 15.7% last month from January, and the sales-to-new-listings ratio is so high that nearly everything that becomes available is selling. At 84% nationwide, the sales-to-new-listings ratio in February decreased to the second-highest month on record from 91.2% a month prior. The long-term average for Canada’s sales-to-new-listings ratio is 54.4%.
Fifteen percent of local markets were considered by CREA to be balanced in February while the remainder were above their long-term averages. The data indicated that there are only 1.8 months of inventory countrywide, which is the lowest on record. More than 40 Ontario markets were below a month’s supply.
The Lakelands region of Ontario cottage country, Tillsonburg District and Woodstock-Ingerstoll recorded year-over-year sales increases above 35%, while Barrie, Niagara, Bancroft, Grey-Bruce Owen Sound, Kawartha Lakes, London and St. Thomas, North Bay, Northumberland Hills, the Quinte and Simcoe Districts, and Southern Georgian Bay were in the 30-35% range.
Hamilton, Guelph, Cambridge, Brantford, Huron Perth, Kitchener-Waterloo, Peterborough and the Kawarthas, and Greater Moncton were in the 25-30% range.
“We are right at the start of the first undisturbed (by policy or lockdown) spring housing market in years and we also have the most extreme demand-supply imbalance ever by a large margin,” Sean Cathcart, CREA’s senior economist, said in the same release. “I think part of it is demand that built up as a result of regulatory changes in the years leading up to COVID that is playing out now. Part of it is demand that is being pulled forward from the future either in search of a home base to ride out the pandemic, or to lock down a purchase amid rapidly rising prices while securing a record-low mortgage rate. But maybe the biggest factor here is the emergence of existing owners with major equity, prompted by the great shake-up that is COVID-19 to pull up stakes and move. First-time buyers, which we have a lot of, are now having to compete with that as well.”
Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
