Canadian Existing Home Sales (September 2021)

Rishi Sondhi, Economist | 416-983-8806

Date Published: October 15th, 2021

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Canadian home sales climb in September for the first time in 6 months

  • Following 5 straight monthly declines, Canadian existing home sales increased by 0.9% m/m in September, coming in at a healthy 48.9k units. However, sales fell 12.0% q/q for the third quarter overall.
  • 5 of ten provinces saw sales gains, led by Newfoundland and Labrador (+18.2% m/m) and New Brunswick (10.1%). Rounding out the rest, sales were higher in Ontario (2.0% m/m), Quebec (1.9% m/m) and Alberta (0.8% m/m). On the opposite end, sales dropped by a significant amount in PEI (-14.4% m/m) and Saskatchewan (-3.7% m/m). In B.C., they dipped by 1.9% m/m.
  • New listings fell by 1.6% m/m. Combined with the sales increase, markets got tighter during the month. Indeed, the sales-to-new-listings ratio tightened to 75.1% from 73.2%. Meanwhile, the months' supply of inventory decreased slightly from August to 2.1 months – well below the long-term average. 
  • Canadian average home prices climbed a sturdy 1.2% month-on-month in September. Prices recorded relatively large gains in New Brunswick (5.5% m/m) and Ontario (2.2% m/m). Meanwhile, prices inched higher in B.C. (0.2% m/m) and Alberta (0.1% m/m) while also climbing in Quebec (0.5% m/m). In contrast, steep declines were seen in Saskatchewan (-2.1% m/m) and Manitoba (-1.2% m/m). 
  • The MLS home price index, a more "like for like" measure, increased by a firm 1.7% m/m. Single family home prices advanced 1.7% m/m, faster than August's gain. On a year-on-year basis, detached prices increased by 24.5% - matching August's gain and halting the slowing trend in place since April. Apartment prices rose by 1.3% m/m – marking a steep acceleration from August. On a year-on-year basis, benchmark condo prices were up 12.2%, also accelerating from August.  

Key Implications

  • The correction in sales from the unsustainable levels achieved earlier in the year is likely over, and September should mark the beginning of a modest positive trend in sales activity. The key word here is modest, as interest rates are likely to grind higher moving forward, playing off against improving job markets, a rising population, and the decision by some households to plow excess savings into down payments. Federal housing policies could provide some lift as well, although only a small impact is expected (see report).   
  • Price growth ran fairly hot in September. The monthly gain in average prices was twice the long-term average. And, both detached and condo benchmark price growth accelerated, with the former notably breaking a string of year-on-year slowdowns. Moving forward, average prices should display stronger growth than sales (despite lower-valued condos consuming a rising share of activity) as markets remain drum tight.