Canadian home sales and prices hit record highs in August, as low borrowing costs and an easing of pandemic restrictions continued to fuel housing demand.
The number of homes sold rose 6.2 per cent to 55,962 on a seasonally adjusted basis from July to August, according to the Canadian Real Estate Association, with strong sales in the Toronto and Vancouver regions, as well as Fraser Valley in British Columbia and Niagara in Ontario.
The seasonally adjusted home-price index, an industry calculation of a typical home sold, hit a record high of $630,000 in August. That was a 1.7-per-cent increase over July and 9.4-per-cent higher than August of last year.
“Every day I look at the numbers, and we are just going gangbusters,” said Colette Gerber, chair of Vancouver’s real estate board.
August marks the second-straight month that home resales and the price index have hit record highs. More homeowners put their properties up for sale, particularly in Toronto, Vancouver and Ottawa, which increased the number of new listings nationally by 10.6 per cent from July to August on a seasonally adjusted basis.
The heated activity comes after government restrictions slowed sales over eight weeks in March, April and May, which is typically the busiest time for resales. That led to more demand when provinces started reopening their economies in May. Record-low mortgage rates and an increase in listings also helped drive activity, according to realtors.
“All of those factors, you put them together, and you have a perfect combination for a surge in sales,” said Debra Harris, vice-president with Royal LePage.
Although Toronto, Montreal and Ottawa were overheating prior to the pandemic, the demand for bigger properties and green space has increased sales of houses in the country’s biggest urban areas, as well as cheaper regions such as Niagara, Hamilton and Burlington in Ontario.
Meanwhile, condo resales in the biggest real estate market of Toronto are not as strong as those of houses, owing to the influx of new supply and less demand.
Those areas saw prices increase by at least 2 per cent month to month. Over the 12 months to August, the home price index increased by 20 per cent in Ottawa, 16 per cent in Montreal, 15 per cent in the Niagara region and 14 per cent in Hamilton-Burlington.
Economists and the national housing agency, the Canada Mortgage and Housing Corp., have said there are risks that the market will slow when government aid winds down and the banks’ remaining mortgage deferrals end. So far, banks have said that most of their mortgage holders have resumed payments when their deferrals ended.
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