Average house prices continue to defy expectations, up 17% last year

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The average price of a home sold on the Canadian Real Estate Association’s MLS service rose to $ 604,000 in September, an all-time high and an increase of more than 17 percent from last year.The group, which represents 130,000 Canadian real estate agents, says that in addition to breaking the previous record on the price side, it was also the busiest September in terms of volume of homes sold, with 20,000 more transactions recorded in addition to the previous record.

Thursday’s numbers are the latest staggering numbers released from the Canadian real estate market, which has defied expectations since March.

The pandemic caused home sales to crater in March and April due to widespread lockdowns, but it has caught fire every month since.

Having to spend months locked up in their homes seems to have sparked a desire among buyers for more space, which is why single-family properties in the suburbs around major cities are driving the gains. “Home has been our workplace, our children’s schools, the gym, the park and more,” said ACI Chief Economist Shaun Cathcart. “Personal space is more important than ever. ”

CREA says its average price is not the best indicator of the market, as it is easily skewed by sales of expensive homes in Toronto and Vancouver. The group of realtors says if those two cities are stripped, the average Canadian home sold last month was $ 479,000. But that figure has risen even more than the global average, by more than 20% over the past year.

The market has been buoyed by housing demand and historically low interest rates, but economist Doug Porter of the Bank of Montreal says that despite this, prices will struggle to keep up their breakneck pace, as programs Deferment of mortgage payments offered by the big banks are scheduled to expire soon, which could lead to a calculation.

“We doubt that this recent scorching force could persist in some of the construction headwinds, which should at least somewhat tame market conditions in the coming months,” Porter said. “The underlying economic conditions just don’t support such a hot market for an extended period. “

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