On Tuesday, June 15, the Canadian Real Estate Association (CREA) released its national housing statistics for the month of May. Below, CREA’s Director and Senior Economist Shaun Cathcart provides an update on the current state of housing markets in Canada and explains what the data means for members.
The Canadian housing story in May 2021 was a continuation of the April one—markets appear to be calming down.
Sales were down about 7% from April to May, with new listings down by about the same. Both were also down from March to April.
That said, it was still a record for sales in the month of May, and the third highest monthly sales figure ever, so things are still very active, just not as frenzied.
Certainly, that is true anecdotally, but you can see it in measures of market balance which are settling down, and price growth is also slowing.
How COVID-19 is impacting real estate now
With the third wave of COVID-19 you could draw comparisons to last year’s initial lockdowns when both supply and demand went away for a while and prices took a brief pause, but I think we can all agree this year feels different.
The main difference of course is this slowdown in the market was coincident not just with record COVID-19 cases and fresh lockdowns but with the big take off in the vaccination rate. So, maybe we all just finally have something else to think about other than housing and being stuck at home all the time.
The trend of needing to secure a home base to ride out the pandemic must be fully in the rear-view mirror at this point, right? The idea among buyers that “we can’t wait” seems to have gone up in a puff of smoke sometime around April Fool’s Day, with a (relatively) more relaxed market re-emerging after the Easter long weekend.
Going forward, later this year and into next (and probably beyond), I think there’s still a good probability of increased activity in existing home markets. As we get more certainty around our post-pandemic lives, one would expect people to move around more than they would have in a non-COVID-19 world in order to make adjustments, just like so many did during the pandemic—but presumably with a lot less urgency and a longer timeline in mind.
Maybe what we’re entering into now is the re-integration phase, where housing activity caused by people adapting to the pandemic is winding down, but we have yet to see the increased activity likely to be caused by the resumption of population growth, pent-up activity from all the people who have been hunkered down this whole time, and from people moving around to adapt to their post-pandemic “new normal”.
For right now, with the light at the end of the tunnel so close, it feels like housing may take a back seat to us all starting to get our lives back to some semblance of normal this summer. Given all the concern about housing markets so far this year, it would be a welcome break.