Canada’s housing market remains very hot despite the arrival of colder weather. The price of a home in this country has hit an all-time high as this year’s market continues to defy past trends.
The latest numbers from the Canadian Real Estate Association put the average price of a resale home at nearly $721,000. That is up nearly 20% from a year ago. And while home sales tend to slow as the winter months arrive, November saw an increase of 0.6% over October. Year-to-date sales are well ahead of last year with more than 630,000 properties changing hands, a 14% increase over the same period in 2020.
Supply-and-demand remains the key driver of prices. New listings increased by 3.3% in November, over October. That outpaced the sales increase and the sales-to-new listings ratio dropped from 79.1% to 77%. But that is still well above the long-term average of 55%, and still well into sellers’ territory.
The prospect of rising interest rates in 2022 will likely keep the market busy as buyers try to secure mortgages and make purchases before borrowing costs rise.
Some buyers will also, likely, be encouraged by news that the mortgage stress test will not be changed. The minimum qualifying rate for uninsured mortgages will continue to be the greater of either: the mortgage contract rate plus 2%, or 5.25%.
Canada Mortgage and Housing reports that housing starts jumped 26% between October and November. Most of that is due to a 41% increase in starts of apartments, condos and other multiple-unit housing projects.