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Low interest rates for mortgages and a shortage of properties for sale continue to fuel competition and push home prices higher. CREA’s home price index rose 2.7 per cent to $770,000 for a typical home across the country.CHRIS HELGREN/Reuters

Canada’s housing market soared in October, with sales jumping nearly 9 per cent and price increases accelerating at a pace not seen since the pandemic’s real estate boom hit a peak in the spring.

After a brief lull over the summer, national resales reached 53,746 last month on a seasonally adjusted basis, according to the Canadian Real Estate Association (CREA).

That is 8.6 per cent higher than September and is the steepest jump in resales since July, 2020, when the first wave of homebuyers scrambled to buy bigger properties to deal with the pandemic’s stay-at-home requirements.

Low interest rates for mortgages and a shortage of properties for sale continue to fuel competition and push home prices higher. CREA’s home price index, which adjusts for pricing volatility, rose 2.7 per cent to $770,000 for a typical home across the country. That is the highest monthly price increase since February and March, when homes in the Toronto and Vancouver suburbs were drawing dozens of offers.

“The fire still burns,” Robert Kavcic, senior economist with BMO, said in a research note. “Demand is still feasting thanks to low mortgage rates,” he said.

With the Bank of Canada moving up the timeline for an anticipated interest-rate hike, home buyers are even more motivated to buy in order to lock in today’s low mortgage rates.

Mr. Kavcic said he expects the momentum to continue until the central bank raises interest rates. “The Canadian housing market is well overdue for higher rates, and momentum is still pointing upward until it gets them,” he said.

Throughout most of the pandemic’s property frenzy, home buyer demand has surged in the suburbs, smaller cities and semi-rural parts of the country. Real estate markets that have never seen strong competition are now at least 30 per cent more expensive than a year ago. That includes most of Ontario, Chilliwack in British Columbia and Moncton in New Brunswick.

The pace of price increases quickened from September to October in most of Ontario. Some parts of Southern Ontario – including Barrie, Cambridge, Hamilton, Burlington and Woodstock – reported a monthly jump of at least 3 per cent, according to the seasonally adjusted home price index.

“After a summer where it looked like housing markets might be calming down a bit, October’s numbers suggest we might be moving back towards what we saw this spring,” CREA chair Cliff Stevenson said in a news release.

In the Toronto region, where prices were not rising as quickly as the suburbs, the home price index spiked to its highest level since the 2016-17 real estate boom. The price index for a typical home in the Greater Toronto Area rose 4.8 per cent to $1,139,400 from September to October. In the nearby suburbs of Oakville and Milton, the home price index was up more than 6 per cent to $1,452,900.

Over a three-month period, the price of a typical house in the Toronto region is up by just over $100,000. In the Oakville-Milton area, it is up more than $200,000 and in the Fraser Valley in B.C., it is up by just over $100,000.

Federal mortgage insurer Canada Mortgage and Housing Corp. has warned that the country‘s housing market is overvalued and overheated. It has singled out Hamilton, Toronto, Ottawa, Halifax, Moncton and Montreal as highly vulnerable to a price downturn.

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