Canadian real estate sales were BOOMING before the pandemic poured a bucket of ice water on it. Canadian Real Estate Association (CREA) data shows sales climbed the most in years. Part of the big numbers are due to the unusually slow start to last year, beefing up growth numbers. The growth was still expected to be large, before the coronavirus put an abrupt halt to the trend.
Canadian Real Estate Sales Jumped Over 40%
Canadian real estate sales were significantly higher last month, compared to last year. There were 38,161 sales in February, up 40.32% from a month before. Compared to the same month last year, this represents a 26.89% increase. This is massive growth – but there’s a couple of notes on that.
Canadian Real Estate Sales
The unadjusted sales for all home types, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
Last month was huge, and some of the biggest growth seen in a long time. The number of sales is the highest for February, since 2016 – when the real estate run began. The 12-month rate of growth is also the biggest seen since March 2010. The last point is notable, because the 2010 climb was being compared to a recession slow down. Last February wasn’t a recession, but it had a sales drop similar to one.
Canadian Real Estate Sales Change
The annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
Distribution plays a big part in why the 12-month growth was so large. Last year had an unusually slow start, so comparing the two months makes growth seem bigger. The 12-month average for February works out to 41,499 sales – big, but not as big as the impression growth gives. As a rolling 12-month average, it’s the biggest month since March 2018. It’s just not quite at the overheating seen in 2016.
Canadian Real Estate Sales Rolling 12-Months
The rolling 12-month average of Canadian real estate sales, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
Vancouver and Toronto Real Estate Markets See Biggest Growth
The biggest growth was seen in Vancouver, Toronto, and Quebec City. Vancouver reported 2,185 sales in February, up 44.5% from last year – the fastest growth in Canada. Toronto comes in second with 7,256 sales, up 44.4% from last year. Quebec City follows with 1,108 sales, up 43% from last year. Yes, all three of these places had 12-month growth numbers over 40%.
Canadian Real Estate Sales By Market
Canadian real estate sales breakdown for selected markets.
Source: CREA, Better Dwelling.
This is a little unusual, but no major real estate market with substantial volume made a decline. The only market in the country with a decline was Regina with just 181 sales in February, down 5.2% from last year. The slowest moving market with over 400 sales was Edmonton, with 1,163 sales, up 8.1% from last year. That’s huge growth, just not 40% growth the biggest markets are seeing.
Canadian Real Estate Sales Change By Market
The percent change in Canadian real estate sales for selected markets.
Source: CREA, Better Dwelling.
Canada’s real estate markets would have seen lower growth going into March, even without a pandemic. The first two months of last year were unusually slow, easily making this year’s volume look huge. Markets were still expected to make substantial gains in volume throughout this year. It just wouldn’t have grown by nearly half every month. Of course that was before the pandemic pressed the pause button on the market.
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It’s not all doom and gloom in Toronto. Multiple offers and bully offers were still happening in the past few days. I do think prices are not being aggressively push up as high as they were even 2 weeks ago and the number of parties coming to the table have diminished. The fundamentals are still there (low inventory vs. demand). There are some who will benefit greatly from the combination of the rate reductions and less competition. Once things start turning around, expect a big spike in activity, especially if the BoC doesn’t adjust rates back up quickly in tune with buyer confidence.
Check rates. The cut didn’t impact rates. They’re rising.
Flight to USD means it’s more expensive to fund mortgages. The BOC doesn’t lend directly to people, you understand that – right?
Canadian dollars lost almost 10% of value in just a few weeks as a result of the flight.
I know at least 3 people in Toronto that backed out of sales, but the bullet and paid penalties because they’re more worried about the future of their job. So there’s that data point on the flip side.
Ai, are you a real estate agent ? what is the reality you are living in? are you aware of the impact of coronavirus on world economy and this is just a beginning? Yes , after millions lose jobs, they will run to buy overpriced houses. Who will approve their mortgage?
Houses cost about $5000 from 1870 to around 1950. Then they when through the roof (no pun intended) from about 1955 forward to today. When prices got a little frothy a world war (2020 pandemic?) doused the froth.
The prices were based on land value – like the real dirt under foot. If you live on the 36 floor your dirt is separated from you by 35 dirt-co-owners.
We are in unprecedented times. That house prices are going up is delusional. That ‘fundamentals’ were ever involved is also delusional.
Remember that Detroit purchaser who bought 1000’s of homes for a few million dollars a few years back? Houses for $5000 each is not unprecedented in our time. In fact its only a couple hundred kms away, and a few years back.
Some reading – http://piketty.pse.ens.fr/files/Schularicketal2014.pdf go to page 21 and look at Belgium.
No one has any idea where this is going, and cash is king. Anyone who says otherwise wants your cash.
wake up people…the dollar is crashing, stock markets crashing , silver, gold down big time, oil plummeting…if you do not think that we are on the verge of a housing crash, you are in for a shock and/or delusional…its coming and fast …Canada is not immune to this coming depression and it will be hit very hard…debt free is the way to go moving forward….its getting ugly
Yep, this is the fastest time the stock market’s ever crashed to -30% in history. We had a yield curve inversion about 12 months ago, which puts us exactly in line with a recession. The US government was already providing liquidity injections ($100B+ each night) to their banking system for most of the fall. A lot of jobs will be affected and the US just put interest rates to 0%.
But hey, no worries, why not go buy a house? Or two!
Clueless is you. We will stave off a depression and bounce back before the summer.
The Bank of Mom and Dad just dried up.. The Dow is down 1/3 from just a couple of weeks ago. Many of us retired folks will not see it return to 30,000 in our life times.
How can anyone think that all asset prices will crash except housing… lmao. Exorbitant sums of money literally disappearing from the planet as we speak, yet housing prices will continue to appreciate… you do realize people need money to buy homes right??
They haven’t thought that far ahead.
People in Canada are under the belief that real estate can only go up.
Lets see what they think in 6 months!
There’s one point your comment doesn’t seem to account. I figure a majority of realists who visit this site (whom others would call bears) comment that it’s outside sources that are inflating the Canadian house prices.
If the above is a correct assumption, then whether or not Canadians think house prices only have an upward trajectory is a moot point. It’s the foreigners who are forcing the housing market’s hand.
If conditions continue to be worse in other countries over Canada, then foreigners may continue dumping money into Canadian real estate. If real estate conditions are tighter in other countries, then foreigners may continue dumping money into Canadian real estate.
I’m a realist. I hate seeing a necessity, such as housing, skyrocket. Good for the short term if people got in before the jump. But awful for others who have had to rent for the last 5-10 years.
One thing’s for certain; foreigners who dumped money into Canadian houses HATE seeing their investment lose traction. The CAD is down to 0.68 versus the USD today (they’re likely dealing specifically in USD).
A lower Canadian dollar makes Canadian real estate cheaper for foreigners to buy.
This is about people who purchased a house at a time when the CAD was stronger versus the USD. All of a sudden, the same house, without house prices even dropping, is worth less due to the USD strengthening.
As for those looking to buy now with a lower CAD versus USD, it’s tough to pull the trigger. For the same reason people don’t buy stocks right away when they’re dropping precipitously. They’re afraid the stock price will keep dropping.
Your assumption is incorrect, not sure who stated this ?
“outside sources that are inflating the Canadian house prices.”
” It’s the foreigners who are forcing the housing market’s hand.”
Sounds like you got a little skin in the game, good luck with the mortgage. People could decide : Canadian real estate is the new gold and drive prices from 9 x our income to 27 x our income. I know in most people’s mind it can never come down……… especially in the minds of the over leveraged.
I am a home owner, my home is up 300 percent in twelve years but, even I know …….. every market has cycles, lets see where we are in 6 months.
Real estate is always a good long term investment if it was a good investment before a recession or depression. There will be a lot of good, even great, opportunities to buy good real estate soon because of the coronavirus effects on the economy and those with the cash or ability to get and pay a mortgage will benefit. I have seen it happen at least 3 times during my lifetime and this is another time it will happen.
You’re thinking of during a recession or depression. Very different. Real estate is the last for prices to fall.
Seems that the article covers sales and property prices before Covid19 actually hit BC. Today about 430 people affected by Caronavirus in BC alone. As per US news, they expect the virus pandemic to continue even up to 18 months, which would mean a further reduction in Stock Market prices, Job Layoffs etc. With already high Insurance cost, hope Better Dwelling could provide an insight in the BC property market for the next 2 quarters 2020.
Nice work detective. Did you get that from the title that literally says “Before The Abrupt COVID-19 Halt?”