National Housing Market Continues Strong Recovery in September: CREA

National Housing Market Continues Strong Recovery in September: CREA


By: Zoocasa


Although home prices and sales are still below their 2016 peak, the Canadian housing market is slowly recovering from a series of provincial government interventions and tighter mortgage lending rules, according to the latest monthly numbers.


Sales activit rose 15.5% in September year over year according to the Canadian Real Estate Association (CREA). That leaves them about 8% below their all-time high, but 18% above the six-year low reached in February 2019.


Benchmark prices were mostly stable, rising 1.34% to $629,200 in the 19 markets CREA tracks. But over five years, these markets posted significant gains of 38.65%. It’s clear that Canadian property remains a solid investment, regardless of the bumpy ride over the last few years.


Price Growth Outpacing Recent Attempts to Cool Market


The governments of Ontario and British Columbia announced measures in 2016 to chill the then-runaway market, and largely succeeded in stabilizing activity in those regions. The federal-bank regulator followed in January 2018 with new nationwide lending rules, restricting borrowers by a stress test that ensured they could afford a mortgage should rates rise 2%. Uncertainty abounded, but the demand for housing is simply too strong and the supply too low to restrict prices or transactions for long.


Supply and Demand Metrics Leading to Sellers’ Market


The population is growing, with over 400,000 immigrants coming to Canada last year alone, and millennials have come of age and are starting families. Boomers are living longer and are not downsizing at the pace predicted. At the same time, inventory is shrinking — Canada only has 4.5 months of inventory left, the lowest level recorded since December 2017 and is far below its long-term average of 5.3 months. New listings shrunk by 0.6% and the sales-to-new listings ratio is at 61.3% - also now far above its long-term average of 53.6%. This will likely lead to increased competition between buyers and higher prices ahead.


The Prairie cities and Newfoundland are some of the only regions bucking this trend — these parts of the country have far more supply than demand and they are one of the only places that have seen prices decline consistently.


Houses for sale in Toronto have now fully rebounded, and are up 5.02% year over year to $806,700. While Vancouver houses for sale dropped by 7.28% to $986,500 from September 2018, this is likely a temporary correction.


To see how other Canadian cities have fared this September, check out the infographic below:




Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at or download our free iOS app