Housing markets in Canada continue to defy gravity and the pandemic – Financial Post

December 17, 2021 by No Comments


Forecasts of a housing bust were grossly overstated, if not outright wrong

Author of the article:

Murtaza Haider and Stephen Moranis, Special to Financial Post

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Dec 16, 2021  •  12 hours ago  •  4 minute read  •  19 Comments A home for sale in Toronto. Photo by Carlos Osorio/Reuters

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The year isn’t over yet, but housing sales in Canada have already surpassed the total sales registered in 2020, once again proving forecasts of a housing bust to be grossly overstated, if not outright wrong.

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Some 630,634 residential properties had already transacted by the end of November, topping the previous record of 552,423 sales in 2020, according to Canadian Real Estate Association (CREA) data.

An increase in prices accompanied the increase in sales. CREA’s quality- and size-adjusted house price index reported a year-over-year increase of 25.3 per cent in November. Prices grew at a much faster rate in smaller towns near populous urban centres. For example, the housing price index in Greater Vancouver increased 16 per cent year over year, while prices in Fraser Valley were up 30.3 per cent.

At the onset of the pandemic in 2020, many housing market forecasts painted doom and gloom by projecting sales and prices to decline. But the reverse has happened, and record high sales and prices are a familiar fixture of most regional housing markets.

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To forecast the future, one must first predict the past or, at the very least, determine why the gloomy housing market forecasts have proven to be so drastically wrong. Some explanations are readily apparent. First, governments globally decided not to let the pandemic kill the economy and responded with unprecedented stimuli, collectively injecting trillions of dollars into the economy. Canada was no exception. Income support programs and …….

Source: https://financialpost.com/real-estate/housing-markets-in-canada-continue-to-defy-gravity-and-the-pandemic

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