The Canadian Real Estate Association said on Monday that the number of homes sold in April fell 12.5 percent from the previous month’s level, which was the busiest month ever for realtors. . The group that represents Canadian real estate agents says sales have declined in 85% of all markets across the country, including virtually all of Ontario and British Columbia.
“While housing markets across Canada remain very active, it is increasingly evident that some of the extreme imbalances of the past year are starting to dissipate, which everyone wants to see happen,” said ACI President Cliff Stevenson.
Real estate has been on fire for a year as the COVID-19 pandemic has pushed interest rates to historically low levels. This, combined with the fact that Canadians have been locked in for months, has had the effect of making buyers willing to pay whatever it takes to get the home they want.
The housing market generally follows seasonal trends, starting the year slowly before heating up as the weather improves. At the end of the summer, sales tend to slow down at the start of the school year, before settling down to end the year again.
But the COVID-19 pandemic that began in March 2020 threw these trends out the window. Sales cratered in March and April 2020 before exploding from May.
In any other year, sales would be higher in April than in March, but March 2021 was the busiest month for real estate on record. April’s slowdown could therefore mark a change of direction – or a failure, TD Bank economist Rishi Sondhi said.
“More months of information are needed to assess whether the market still has bullish momentum or whether activity is indeed on a cooling path. However, in the short term, we expect sales to trend lower in the second half of the year due to growing interest. tighter stress testing tariffs and regulations are starting to bite, ”he said. “It should also dampen some of the price growth steam. “
As the number of home sales slows, the price increases are still spectacular. The average price of a Canadian home sold in April was $ 696,000, a 41.9% increase from the level of the previous year.
CREA says the average price can be misleading because it is skewed by sales in major markets such as Toronto and Vancouver, so it releases another figure, called the House Price Index, which adjusts for that. different markets and types of housing.
But even the HPI rose 23.1%, the highest annual increase on record since 2005.
Bank of Montreal economist Robert Kavcic says April’s numbers still paint a picture of a booming real estate market. “Demand is extremely strong even though it is down from record levels,” he said.
“This market is still extremely strong across geography and segment, although we’ve probably seen momentum spike – it’s still a long way from the moon.