The Canadian Real Estate Association says annual home sales hit a new high in 2021, eclipsing the previous record set in 2020 by about 20%.
The association said Monday that about 667,000 residential properties changed hands in 2021, about 30% more than the 10-year average.
However, home sales in December were little changed from November and were associated with a shortage of properties in the market that was so extreme that CREA’s senior economist Shaun Cathcart called it a record high.
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New registrations for December fell 15% to 28,550 from 33,606 in the same period a year earlier.
TD Economics economist Rishi Sondhi said listings have not kept pace with sales.
“In fact, the number of newly listed homes last year was below levels that generally prevailed before the pandemic hit,” Sondhi wrote in a note to investors.
“It could be that a lack of supply is perpetuated, as potential sellers who would be more active in ‘normal’ times hold back their listings due to a lack of inventory to relocate to and a intense competition for available properties.”
The lack of available properties weighed on sales, which rose only 0.2% on a seasonally adjusted basis between November and December.
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On an unadjusted basis, there were 35,971, down nearly 10% from 39,940 in December 2020.
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Sondhi believes some of the “foam” will come out of sales this year as interest rates, which have fallen significantly throughout the COVID-19 pandemic, are likely to rise. However, he thinks the urge of many buyers to act now rather than later will keep sales above pre-pandemic levels.
That could mean little reprieve for homebuyers hoping to shell out less on a property.
The national average home price reached $713,500 last month, up nearly 18% from the previous December.
Excluding the Greater Vancouver and Greater Toronto areas _ two of the busiest and most expensive housing markets in Canada _ from the calculation reduces the national average price by more than $150,000.
In the GTA alone, the average price was over $1.1 million, up about 24% from $932,004 last year.
In the Greater Vancouver area, the average price was over $1.2 million, up 15% from around $1.1 million the previous year.
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ACI found that year-over-year price gains were still in the mid-high single digits in Alberta and Saskatchewan, but were around 12% in Manitoba and 30% in Ontario. .
Year-over-year price growth in Greater Montreal remained at just over 20%, with the average price in December reaching $527,600, while Quebec City saw half that growth and an average price of $303,700.
Price growth was 11% in Newfoundland and Labrador and over 30% in New Brunswick.
“With interest rate callback behavior keeping demand so strong and supply struggling to keep up, it’s no wonder prices continue their relentless advance,” Sondhi said.
“However, while prices will likely rise this year, higher interest rates should slow the rate of increase.”
© 2022 The Canadian Press