Canada's real estate market is experiencing a remarkable surge in sales, primarily driven by Ontario and British Columbia
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Loading... - Jude Baker
- 26 May 2023
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The start of the busy spring market in April witnessed a substantial increase in home sales across the country. According to the Canadian Real Estate Association's latest data in May, sales escalated by 11 percent compared to the previous month, reaching the highest level since June of the previous year.
The surge in sales was observed in eight out of ten provinces, as highlighted in a report by TD Economics. Ontario witnessed the most significant jump with a remarkable 19 percent increase, closely followed by British Columbia at 16 percent. Alberta also experienced robust activity, with an eight percent surge in sales from March to April, ranking third in the nation in terms of sales growth.
However, while sales thrived, new listings struggled to keep up with the pace of demand in Canada. According to TD's recent report, new listings only increased by approximately 1.6 percent on a monthly basis. The limited availability of listings created a tight market condition that strongly favored sellers. The sales-to-new-listing ratio surpassed 70 percent at the national level, indicating a seller's market. Typically, any percentage above 60 percent signifies such a market condition.
Consequently, average home prices experienced an upward trend as well. In April, the average price of a home in Canada rose by six percent compared to March. Nova Scotia stood out with a notable increase of seven percent. Based on data from the Canadian Real Estate Association, the overall average price in April exceeded $700,000.
Ontario witnessed a six percent increase in average prices, while Alberta and British Columbia saw a four percent rise. The TD report highlighted that the spring season witnessed a rebound in home sales following a multi-year low earlier in the year. This recovery was driven by factors such as stable interest rates, a robust job market, and an improved buyer psychology.
However, the report also cautioned that further growth might be hindered by affordability challenges. The subdued supply of housing, rather than recovering demand, was identified as the primary factor impacting pricing. TD concluded that the real estate market could face obstacles due to these affordability concerns.
