With malls closed over the holidays in many places due to the pandemic, it seems Canadians went shopping for houses instead.
Home sales in December ― typically a dead zone for real estate transactions ― hit all-time highs in Toronto, Montreal and Vancouver, the cities’ real estate boards reported this week.
“A strong economic rebound in many sectors of the economy, ultra-low borrowing costs and the enhanced use of technology for virtual open houses and showings fuelled and sustained the housing market recovery,” Toronto Regional Real Estate Board president Lisa Patel said in a statement.
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The average selling price for a home in Greater Toronto was 11.2 per cent higher this December than a year ago, having jumped nearly $100,000 in a year to $932,222. The 7,180 homes sold last month amounted to a 64.5-per-cent increase from the previous December.
In the suburban 905 region, the average selling price increased by a stunning $145,000 in the space of a year, reaching $955,086.
It was a similar story in Vancouver, where home sales hit a record high for December, though price growth was softer than Toronto, with the benchmark price of $1.047 million up 5.4 per cent in a year.
“All it needed was a pandemic,” quipped Bank of Montreal economist Robert Kavcic in a client note on Vancouver real estate.
Kavcic noted that Vancouver experienced years of slumping home sales amid high prices, but in 2020 sales were up 22.1 per cent compared to the year before.
“Who knew that the pandemic would be medicine for this market?” he asked.
Calgary, which has been hit hard by the oil slump, saw home sales jump 40 per cent from a year earlier to hit their highest December level since 2007, the local real estate board reported.
Condo markets go in opposite direction
Greater Montreal recorded an all-time high volume of home sales, up 32 per cent from a year earlier, but its real estate board noted that the region is seeing “an increase in condominium listings that far exceeds the number of condo sales on the Island of Montreal.”
While condo prices are still on the rise in Montreal, up 14 per cent in a year, they’re growing more slowly than detached homes, which jumped 22 per cent in the past year.
Increasing supply is often a sign of falling prices ahead, which is what the City of Toronto is now seeing. The average price of a condo in Toronto is down 4.6 per cent in a year, to $625,828, even as detached homes jumped 17.7 per cent, to $1.24 million.
“There was a dichotomy between the single-family market segments and the condominium apartment segment,” said Jason Mercer, TRREB’s chief market analyst.
Buyers are competing for detached homes that are in short supply, while new condo listings are outstripping demand, giving condo buyers more options, Mercer said, which pushed condo prices down in the last months of 2020.
“The next 12 months will be critical as we chart our path through recovery. In particular, the impact of resumption in immigration and the re-opening of the economy will be key,” Mercer added.