100,000 realtors across the country said a total of 58,209 homes changed hands during the 28-day period. Nevertheless, CREA noted that the average selling price on its own could be misleading since it was largely triggered by big expensive markets like Vancouver and Toronto. It pointed out that a whopping $178,000 could be shaved off by simply removing these two cities from the numbers.
This is the reason by the Association also tabulates what is known as the House Price Index, to adjust the type of housing as well as the volume that is being sold. However, this metric has also been hiking at its fastest pace on record, with a 29 per cent annual increase. In February alone, it jumped by 3.5 per cent, recording its biggest monthly increase.
Considering the impact of the pandemic on Canada’s housing market, sales volumes and price growth slowed to crawl in March and April 2020, at the beginning of the global health crisis. This was owing to the fact that many buyers chose to keep their wallets closed in response to the uncertainty involved. However, since then, the market has been running red hot, with record-low borrowing costs triggering an insatiable demand for housing.
This record amounts of cheap debt have inflated the high prices and experts warn that mortgage holders should brace themselves for a reckoning on that front, with the Bank of Canada raising its benchmark interest rate earlier this month for the first time in two years. Meanwhile, economists project up to another half a dozen hikes during this year, which is expected to take the central bank’s rate up to two per cent.
