Canadian home prices posted a record monthly surge in January as a plunge in the number of homes listed for sale has led to a historically tight market nationwide.
Canada’s benchmark home price jumped 2.9 per cent, the biggest monthly gain in data going back to 2005. The number of homes put up for sale fell 11 per cent, according to data released Tuesday by the Canadian Real Estate Association. With the number of sales rising 1 per cent in January, the ratio of sales to new listings -- a measure of market tightness -- jumped to 89 per cent, the second highest on record.
“As expected, January was pretty quiet on the new listings side of things, with this year’s first big new supply numbers unlikely to emerge until the weather starts to warm up a bit,” Cliff Stevenson, the real estate board’s chair, said in a statement. “The question is will that supply be overwhelmed by demand as it was last spring, or will we start to see the re-emergence of some of the many would-be sellers who have been hunkered down for the last two years?”
Canada has been left with a historically low number of homes for sale after the COVID-19 pandemic helped drive the market into a record frenzy over the last two years. That’s left governments across the political spectrum -- from Prime Minister Justin Trudeau to Ontario Premier Doug Ford -- scrambling for ways to add supply, even as experts forecast the imbalance Canada’s market currently finds itself in may take years to unwind.
In January, Canada had just 1.6 months of housing stock nationwide, tied for the second lowest level on record, the real estate board data show.
“The ideal situation between now and the summer would be that a huge surge of sellers come forward looking to sell in the spring 2022 market,” said Shaun Cathcart, the real estate board’s senior economist.