The Canadian Real Estate Association warns that the country's housing market is heating up again heading into 2022. Sales rose 0.6% m/m in November and are down just 0.7% from the red-hot November 2020 levels. The rise comes on the heels of an 8.6% increase in October.
In the past year, Canadian home prices rose a record 25.3%, including another 2.7% in November.
There was some sign of supply in the extremely tight market with newly listed properties up 3.3%. There's just 1.8 months of inventory, tying the lowest ever.
“Housing cycles can be very long, so market trends do not care that we’ve put new 2022 calendars up on our refrigerator doors,” said Shaun Cathcart, CREA’s Senior Economist. “The fact is that the supply issues we faced going into 2020, which became much worse heading into 2021, are even tighter as we move into 2022. Interest rate hikes will make it even harder for new entrants to break into the market next year, even though activity may remain robust as existing owners continue to move around in response to all of the changes to our lives since COVID showed up on the scene. As such, the issue of inequality in the housing space will remain top of mind.
The average national home price was $720,850, which is about double the US price (unadjusted for FX). That's an accident waiting to happen.
