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Canada's Home-Sales Boom Doesn't Even Notice COVID-19's Second Wave

The average house price in Ottawa has jumped 12% in a single month.
An aerial view of houses in Kanata, a suburb of Ottawa. The region has seen a 12-per-cent jump in the average house price in one month.
JoaoBarcelos via Getty Images
An aerial view of houses in Kanata, a suburb of Ottawa. The region has seen a 12-per-cent jump in the average house price in one month.

The unstoppable juggernaut that is Canada’s residential real estate market showed no signs of letting up in January, even as renewed pandemic lockdowns kept buyers searching from home and many sellers on the sidelines.

Numbers for Greater Toronto aren’t in yet, but most other major metro areas in Canada reported a record-breaking month, with Greater Vancouver clocking a 52.1-per-cent spike in the number of home sales, compared to last January. The benchmark price for all property types, $1.057 million, is up 5.5 per cent in a year.

Even Calgary ― whose economy has been hit by the oil slump ― is now a seller’s market, National Bank of Canada declared this week. New listings fell even as sales jumped 49.6 per cent compared to a year ago, creating the tightest market the city has seen since 2014.

Watch: Why governments don’t mind rising house prices. Story continues below.

“This could result in an acceleration in the growth of house prices,” economist Daren King wrote.

Similar stories played out in most major metro areas, with sales ― and in most cases prices ― up by double digits in Edmonton, Halifax, Montreal and Winnipeg.

But among major metro areas, Ottawa took the prize in January, with the average price of a non-condo home up 12 per cent in a single month, to a record $677,197. That’s up 31 per cent in the past year.

Ottawa’s real estate board cautioned against reading too much into those numbers, noting the average price was pulled up by an unusually large number of high-end home sales last month. But even excluding sales in areas where the average price is above $1 million, the average price in Ottawa would have been up 26 per cent, according to the Ottawa Citizen.

Across almost all major markets, the number of new listings fell in January, putting further upward pressure on prices, and in almost all cases, there was more interest in suburban areas than in city cores.

Not just Canada

What’s playing out in Canada’s largest cities is part of a worldwide pattern. House prices in 32 OECD member countries are growing at their fastest pace in 15 years, with price growth in virtually every country, National Bank of Canada noted this week.

“Income support programs put in place by governments combined with interest rate cuts have allowed real estate prices to swell during this recession,” economist Matthieu Arseneau wrote.

The housing boom has “spared the banking system losses” in the COVID-19 economic crisis, Arseneau added, and it “bode(s) well for the economic recovery if the pandemic can indeed be brought under control this year.”

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