Across the Provinces - Canadian housing expected to reach new benchmark

The national average house price is expected to rise 9.1% – to $ 620,400 – in 2021, the Canadian Real Estate Association (CREA) said today. Supply shortages, especially in Ontario and Quebec, are expected to drive strong price growth, while Alberta and Saskatchewan are expected to see average prices rise after several years of depreciation, the group said. “Current trends and outlook for housing market fundamentals suggest that activity will remain relatively healthy through 2021, with prices continuing to rise or remaining stable in all regions,” CREA said in a press release.

CREA, which represents more than 130,000 real estate agents across the country, also reported that national home sales continued to reach historically high levels in November, with sales up 32.1% from November 2019.

Home sales slowed in October but the average price rose 15% last year, according to ACI So far this year, some 511,449 homes have traded hands on Canadian MLS systems, up 10.5% compared to the first 11 months of last year. “Many Canadian real estate markets continue to experience historically strong levels of activity, so much so that a new annual sales record this year seems more likely every day,” said ACI President Costa Poulopoulos in the press release. Robert Kavcic, senior economist at BMO, said the housing market is expected to remain healthy in 2021, even as home sales and starts decline from current high levels. “Markets outside the core of major cities remain extremely tight and price growth is expected to continue through 2021,” he said in a comment. “It remains to be seen how the ravenous acquisition of rural / vacation properties plays out later in 2021 and 2022, assuming the [COVID-19] vaccine is effective. It would be reasonable to expect these markets to cap or even recoup some (but not nearly all) of the recent price gains.

In a separate press release, Canada Mortgage and Housing Corporation. (CMHC) reported a 14.4% increase in housing starts in November from the previous month. CMHC said the seasonally adjusted annualized housing starts rate for all regions of Canada was 246,033 units in November, up from 215,134 units in October. “As other sectors of the economy are gripped by the second wave of COVID, housing starts ignored all challenges and accelerated again in November,” said Royce Mendes, of CIBC’s economics division. He said November’s figure was not only the second highest this year, but also the second highest monthly reading since 2017. It also beat forecasters’ consensus projection of about 213,000. Multi-family housing starts led to an increase in November. CMHC said urban multi-family housing starts rose 22.5% to 177,661 units, while urban single-family housing starts fell 3.8 percent. % to 55,445 units. National rural housing starts were estimated at a seasonally adjusted annual rate of 12,927 units last month.