Average Canadian house price rose 14% in a year up to July
BY: RON ANGELES
Home sales are soaring to 30.5% a year-over-year despite CoVid pandemic, which affects the whole world. A mortgage broker in Hamilton and Toronto could help you with this.
Even the home prices set its new record high of$571,500, a 14.3% increase from July 2019 as per CREA or Canadian Real Estate Association. The national average would be $454,500, excluding the higher-priced markets of Vancouver and Toronto Real Estates.
“What a difference three months makes, from some of the lowest housing numbers ever back in April to the records logged in July 2020?” said Shaun Cathcart, a Senior Economist of CREA. A considerable part of what we are seeing here now is just a change in direction in an activity that would have happened earlier this year. Remember before lockdowns, we are in the tightest spring market in almost 20 years.
“Covid-19 did not damage this year’s spring market – it mostly delayed it,” said Hogue. The busy spring market activity is now taking place during summer, a traditionally slower period for home sales. We expect further unwinding of stifled demand to keep sales brisk in August and September before cooling later this year,” he added.
Another factor for low housing supply is the unusual situation of the real estate market, while unemployment is above 10%.
How long would it take to liquidate current inventories of sale rate? It is 2.8 months of inventory.
A Look at Individual Markets
listed below are the average prices stand in some of the country’s key markets:
Ottawa: $506,700 (+18.4%)
Halifax: $363,692 (+17.2%)
Kingston, ON: $458,026 (+15.2%)
Fredericton: $571,471 (+14.3%)
Greater Montreal Area: $401,300 (+14.1%)
Greater Toronto Area: $880,400 (+10%)
Greater Vancouver Area: $1,031,400 (+4.5% year-over year)
Victoria: $724,600 (+3.5%)
Calgary: $411,200 (-1.4%)
Making Sense of This Housing Market
Covid-19 changed the world, and it hits even the real estate industry. Canada’s largest housing markets were becoming visible. Its foamy levels of activity have not been seen since 2016. In January 2020, the GTA recorded an 8.5% increase in selling prices compared to last year.
Much of that demand came from the first-time home buyers competing against each other to fear of missing out.
In GTA, home prices soared 10% increase to an average of $800,400 for all property types.
Homebuying intentions are still getting more robust than ever. The percentage rate of renters who said they plan to buy a house for the next 12 months is doubled from 7%-14% as per Mortgage Professionals Canada. Also, 9% of current homeowners plan to purchase a home within the next year, up from 7% in 2019.
It is tough to understand how the housing market can be so in-demand even the unemployment rate remains critical nowadays.
One possible explanation, he says, is to look at the demographics most impacted by COVID-related job losses.
“The pandemic has disproportionately impacted lower-income Canadians, who are less likely to be homeowners.” Adding that July employment among low-wage earners was 85.4% of pre-pandemic levels, compared with 97.4% for all other paid employees, said Brian DePratto of TD Economics,
Secondly, government assistance programs like CERB and subsidized mortgage fees are beneficial to those affected by COVID are likely to keep economic data stronger than usual. Although this program is about to expire this September of 2020.
“Several support programs, including mortgage forbearance, are helping insulate the economy from the worst impacts of the pandemic,” DePratto said. “As autumn approaches, these programs will expire. This could bring valuable headwinds to housing markets, particularly prices, depending on the progress of economic recovery.”
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