Canada’s major real estate markets are picking up steam heading into fall and not just in Toronto and Vancouver.
The Canadian Real Estate Association (CREA) says sales are down 17.5 per cent from the scorching pace during the same month last year, but they are up 0.9 per cent month over month.
September 2020 was a tough act to follow, setting a record for the month. But last month was the second-highest September on record for sales. It was also the first month-over-month increase since March.
The national benchmark price was up 1.7 per cent month-over-month and 21.5 per cent year-over-year.
Among major cities, Halifax is up 27.5 per cent in 2021 followed by Toronto at 18.3 per cent, and Montreal which was up 15.5 per cent.
As the below graphic shows, even bigger gains can be found in smaller towns that many might never have heard of. Most of them are in Ontario.
Home prices from here
CREA says a lack of homes for sale is a key factor behind price gains.
“We are still stuck at around 2 months of inventory nationally, the thing to keep a close eye on going forward will be the behaviour of prices,” said CREA’s Senior Economist Shaun Cathcart.
“While the acceleration in home prices we saw in September was more than most would have expected, the fact that prices are now moving back in that direction is not surprising.”
BMO senior economist Robert Kavcic says mortgage rates could be a factor but supply issues could accelerate price gains.
“One can't help but feel as though the Canadian housing market is walking on tinder again, with demand holding at historically high levels, listings getting quickly absorbed, and price growth running steady near a 20% pace," said Kavcic.
“That said, five-year fixed mortgage rates likely face meaningful upside in the months ahead, which could act as a dampener. If not, or if there is a heavy rotation to variable and the market starts to accelerate again from here, talk of earlier Bank of Canada moves will only grow louder."
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.