Home Sales Drop In Canada After Record-Breaking March

Data from the Canadian Real Estate Association (CREA) shows that the home sales dipped in April following a month of historically high sales.

The CREA, which represents realtors in Canada, released its April data on May 17. Most notably, the data shows that sales dropped by 12.5 percent across the country compared to sales in March. Additionally, most markets in Canada – about 85 percent in the country – saw drops.

March saw a boom in home sales in Canada, and experts suspect that it happened due to the unpredictability of life following the beginning of the COVID-19 pandemic last spring.

“While housing markets across Canada remain very active, there is growing evidence that some of the extreme imbalances of the last year are beginning to unwind, which is what everyone wants to see happen,” said CREA chair Cliff Stevenson.

The pandemic has dramatically affected the real estate market. Normally, the market follows a predictable pattern: home sales rise in the spring, peak in the summer, and dip when fall begins. When the pandemic began, however, sales dipped almost instantly. They finally began to rise again in May – and March 2021 has been the busiest month on record.

With April 2021 showing signs of slowing down, it’s not clear yet whether the year’s peak came early or if sales will continue to fluctuate.

According to TD Bank economist Rishi Sondhi, “More months of information are required to assess whether the market still has some upward momentum, or if activity is indeed on a cooling path.” He added that sales may lower as interest rates rise and stricter stress test regulations are implemented.

Mortgage broker Samantha Brookes told CBC News that would-be buyers have stopped trying to find a home, causing the April drop.

“Buyer fatigue is real,” she said. “If you are putting in offers on 10, 20 homes, you’re tired and probably thinking you are wasting your time right now […] because there’s nothing in the price range for the average person right now.”

Pricing data was also revealed in CREA’s report. The average price of a home in Canada reached $696,000 – an increase of 41.9 per cent from the average price in April 2020.

CREA notes that large markets like those in Toronto and Vancouver likely skewed the average prices. They suggest looking at the House Price Index, which functions similarly to the average price, but takes market relativity into account. The HPI rose 23.1 percent from last April.

As Canada’s hot housing market continues to make national news, experts are anticipating data recorded during May to determine what path the market is on.