The latest numbers from the Canadian Real Estate Association suggest some heat may be returning to Canada’s housing market.
CREA’s September report shows sales increased almost 1.0% compared to August, following about six months of declines. Compared to the record setting September a year ago, sales for the month are down more than 17%.
Prices continued their upward march, pushed by unrelenting demand and unrequited supply. New listings fell 1.6% from August to September. The sales-to-new listings ratio is now at 75.1%.
The National Average price topped $686,000 in September, up 14% from a year earlier. That number is, as always, heavily skewed by Toronto and Vancouver. When the biggest and busiest markets in the country are taken out of the calculation the average price dips by nearly $150,000.
Toronto and Vancouver are among the six cities named as “Bubbles” in the annual Global Real Estate Bubble Index prepared by Swiss bank, UBS. The bank defines a bubble as “a substantial and sustained mispricing of an asset, the existence of which cannot be proved unless it bursts.”
Toronto has moved up one spot from last year to second place, behind Frankfurt, Germany. Vancouver is in 6th spot, behind Hong Kong, Munich and Zurich.
The bank says prices have become detached from the fundamentals, rising 8% between mid-2020 and mid-2021 in Toronto. Vancouver has seen an 11% increase over the same period, effectively erasing the decline in prices experienced through 2018-2019.