Home prices in Canada increased past 25% in November compared to November 2020. The record year-over-year high results from low supply and continuing low-interest rates.
New information from Canadian Real Estate Association (CREA) revealed that the typical price of a resale house struck $720,850 last month, shattering the previous record high set back in March.
Sales likewise saw a month-over-month boost, increasing by 0.6%, with rates throughout the nation surging by 2.7% in November compared to the month in the past.
In a press release, Shaun Cathcart, CREA’s primary financial expert, stated that the housing inventory challenges dealt with by the Canadian real estate market would continue in the year ahead. Despite a 3.3% boost in new listings and more than 300,000 new home construction starts.
“The supply issues we faced going into 2020, which became much worse heading into 2021, are even tighter as we move into 2022,” Cathcart said. “As such, the issue of inequality in the housing space will remain top of mind.”
2021 is the most popular year on record for the nation’s real estate market, with CREA figures indicating that more than 630,000 houses have sold — far exceeding 2020’s record of 552,000.
Financing Minister Chrystia Freeland said that the growing real estate unaffordability crisis would take “years” as she revealed in Tuesday’s federal government financial update. “In addition to rising inflationary pressures, strong housing demand throughout the pandemic – combined with limited supply – has led to significantly higher house prices across the country,”
Moving into 2022, CREA has kept in mind that the real estate market will deal with numerous difficulties ahead in addition to those ongoing supply problems. CREA stated, “Ongoing strong demand from an unobservable but no doubt large number of households waiting for new listings to show up will be one tailwind”.
“There will also be headwinds, chief among them higher interest rates. While the Bank of Canada has set the stage for a tightening cycle of still indeterminant size to begin as early as April of next year, mortgage rates have already started to move higher, first this past spring, and again in the last few months.”