Dark clouds looming over Canada’s once-thriving housing market are starting to clear off. If we take a close look at the online and offline housing market of Canada of late, we will find it teeming with activity. Buyers and sellers with swathes of confidence have set the market on fire again.
For some real estate experts, this development is surprising and unexpected, since we are in the middle of a pandemic, with unemployment levels breaking records, gas prices touching new lows and the future looking uncertain.
The pandemic had walloped the housing market with its onset in March as realtors couldn’t host open houses and buyers went off the market fearing an uncertain future. But the invisible spectre couldn’t hold the real estate market hostage for long as it sprung back to life in magnificent fashion.
Home sales defy Covid
According to Canadian Real Estate association (CREA), national home sales shot up along with rise in property prices in June 2020. Transactions were up by 15.2%, while the average property price surged by 6.5% from June 2019 to $539,000. There were 41,628 seasonally adjusted sales in June, up by 63.0% from a month before. The unadjusted sales stood at 54,928 units.
Economists with an eye on Canada’s housing market say that while June’s housing numbers are back to normal levels, it is safe to wait and watch the following months with optimism before passing the final judgement that the housing market has fully recovered. Real estate experts tracking the momentum of the property market are hopeful of a stronger July.
Quoting the month-over-month data, we can say that real estate sales have not only rose 150% over where they were in April in the whole of Canada but have seen significant rise in sales in prime markets of Canada. Greater Toronto Area saw sales rise by 83.8%, Montreal by 75.1% and Greater Vancouver by 60.3%.
The fear in homebuyers about whether property prices will hold good in the coming months have subsided. Those languishing in the side-lines earlier owing to the virus have returned to the market all buoyed up and willing to buy a home, with interest rates still going low. Homebuyers who had delayed their purchases during the lockdown are scouring online real estate portals for a better deal.
The Toronto Regional Real Estate Board (TRREB) expects consumer confidence to improve as the economy has reopened, offices are resuming, and vacancies are fresh on the employment charts. The pent-up demand is coming out to the fore, which according to real estate experts have fuelled the explosive housing sales in June.
Low inventory fuels bidding
The only reason for worry though is the dearth in supply of housing inventory. The national inventory levels have fallen by 16% and the market is left with just 3.6 months of housing supply. This situation has forced buyers to bid fiercely for properties.
However, with the demand for home ownership getting stronger day by day and prices of properties swelling, one can expect sellers to list their properties en masse. Also, the present market is a seller’s one since the sales-to-listing ratio stands at 63.7%.
Homebuyers are upbeat about buying new homes, with or without Covid, and real estate agents expect that a strong third-quarter sales growth can put the real estate market in a good position. Also, lower rates by Bank of Canada for the years to come can come as a good tiding for the housing market as it will help first-time homebuyers to take a chance on buying a home.