In terms of the Canadian Housing Market, the virus looks like a minor inconvenience. According to data from the Canadian Real Estate Association (CREA), prices in July increased significantly—and not just in market hotspots like Toronto and Vancouver.
Part of the reason prices are growing at a breakneck speed is the interest rate, which has reached a record low. The average price of a typical Canadian home reached $637,600 in July, up a whopping 2.34% from the month before. Compared to the same month last year, this is a 7.56% increase.
The July increase marks the third consecutive month of acceleration. Across the country, all the major markets have seen an increase. Ottawa led the pack with prices increasing by 2.99% for July. Guelph followed closely with a more modest 2.97% increase, and Montreal saw prices rising 2.82% from the month before.
Stable Long Term Growth
In Vancouver, there was a significant 0.72% increase, bringing the gains to 4.83% from last year—but that’s just a fairly stable average of 1.61% over the past 3 years.
Typically, when every market sees growth at once, it’s usually more indicative of credit conditions than market fundamentals. The low lending rate has proved to be a tremendous lure to many Canadians who are digging deep into their pockets to take advantage of markets that are displaying steady, stable growth at favorable lending rates.
The demand has spurred housing prices, which didn’t see much of a change even during the height of the COVID pandemic. If the country remains impacted by COVID there’s maybe downward pressure on pricing, particularly if people who have been waiting to sell add inventory to the market.
However, the sales-to-new listings ratio jumped to 0.74 Canada-wide in July—the highest it’s been in 18 years. The benchmark price of Canadian homes will certainly be impacted by COVID and plans for economic recovery, but so far favorable lending conditions have coupled with buyer’s frustration to keep the housing market robust and stable.
Working with Ariane Benjamin
As an experienced townhouse realtor, Ariane Benjamin focusses on the purchase and sales of townhouses in Vancouver Proper. Her one-on-one approach exemplifies a customer-first attitude, allowing her to deliver greater results and value while coordinating swift, smooth transactions. Ready to discuss buying or selling? Schedule a complimentary consultation to get the insight necessary to make the best decisions. Call (604) 779-1500 to get started.