The average price of a resale home in Canada is now at an all-time high
House prices in Canada climbed by more than 25% in November compared with the same month in 2020, with that record year-over-year increase spurred by lack of supply and continuing low interest rates.
New data released by the Canadian Real Estate Association (CREA) showed that the average price of a resale home hit $720,850 last month, shattering the previous record high set back in March.
Sales also saw a month-over-month increase, rising by 0.6%, with prices across the country spiking by 2.7% in November compared to the month before.
Shaun Cathcart, CREA’s chief economist, said in a news release that the inventory challenges faced by the Canadian housing market showed little sign of slowing down, with further shortages expected in the year ahead.
Read more: Canadian housing starts rebound in November
That’s despite the fact that construction began on more than 300,000 new homes in November and newly listed properties registered a 3.3% increase.
“The supply issues we faced going into 2020, which became much worse heading into 2021, are even tighter as we move into 2022,” Cathcart said. “As such, the issue of inequality in the housing space will remain top of mind.”
2021 is already the hottest year on record for the country’s housing market, with CREA figures showing that more than 630,000 homes have been sold this year – far surpassing 2020’s record of just over 552,000.
Finance Minister Chrystia Freeland warned that addressing the growing housing unaffordability crisis would take “years” as she unveiled the federal government’s fiscal update on Tuesday.
“In addition to rising inflationary pressures, strong housing demand throughout the pandemic – combined with limited supply – has led to significantly higher house prices across the country,” the government’s update emphasized.
Moving into 2022, CREA has noted that in addition to those ongoing supply issues, the housing market will face several hurdles ahead.
“Ongoing strong demand from an unobservable but no doubt large number of households waiting for new listings to show up will be one tailwind,” it stated.
“There will also be headwinds, chief among them higher interest rates. While the Bank of Canada has set the stage for a tightening cycle of still indeterminant size to begin as early as April of next year, mortgage rates have already started to move higher, first this past spring, and again in the last few months.”
