Statistics released on Friday by the Canadian Real Estate Association (CREA) showed that national home sales in Canada set an all-time record in December 2020.
Not only did home sales set a monthly record in December, but a yearly record was also set.
December sales increased 47.2 percent in December 2020 compared with December 2019. December’s figure was the largest year-over-year gain in monthly sales in 11 years.
Home Sales in December were also up 7.2 percent compared with November. There was 12,000 more transactions December from the previous month.
The CREA reported that 551,392 homes were sold in 2020, up 12.6 percent from 2019. Last month saw, the seasonally adjusted annual rate of home sales hit 714,516, surpassing 700,000 for the very first time in CREA history.
Douglas Porter, chief economist at BMO Capital Markets Economic Research, in a client note about CREA’s report said:
“This sweeping strength in sales heavily suggests that what’s driving this market are broad overall factors, and not local economic factors. Specifically, the plunge in interest rates last year and the pandemic-driven move to upgrade have lifted all markets,”
“Suffice it to say, it wasn’t at all obvious that this is how things would play out 10 months ago.”
Canadian House Prices Soar Too
As well as home sales soaring, Canadian home prices rose at record rates too.
In December, the national average home price was a record $607,280, up 17.1 percent from the same time the previous year.
Areas that recorded the largest price gains in December were in Ontario, where prices rose over 30 percent on an annual basis.
Calgary and Edmonton saw only modest price increases – 1.5 percent and 2.7 percent, respectively.
Home Prices to Cool?
Although 2020 was a record year of growth for Canada, already, there are those that are expecting prices and activity to cool in 2021. The strong economic news follows a dip in Canadian employment for the first time since April 2020.
TD Bank economist Rishi Sondhi said in a note to clients:
“What a fitting end to a surprisingly strong year,”
“Relative strength in high-wage employment, record low mortgage rates, rising supply of homes available for purchase and solid demand for larger units all supported exceptional sales and price growth last year.
“Looking ahead, we’re expecting sales and prices to cool somewhat from their robust pace in the first quarter. However, December’s surprisingly strong performance makes hitting our forecast a tougher proposition.”
