Canadian home sales and prices surge, while starts remain elevated

OTTAWA: Canadian home sales and prices continued to surge in February, setting new records amid strong demand across much of the country, prompting the Canadian Real Estate Association (CREA) to revise up its sales forecasts for the year.

Separately, housing starts fell in February from January, as cold weather returned, data from Canada's national housing agency showed, though starts remain well above pre-pandemic levels amid strong demand.

Home resales jumped 6.6% in January from February, and actual sales, not seasonally adjusted, soared 39.2% from a year earlier, CREA said on Monday. The group's Home Price Index was up 17.3% from last February and up 3.3% from January.

"The two big challenges that continue facing Canadian housing markets are the same ones we've been facing for months - COVID-19 and a lack of supply," said Costa Poulopoulos, chair of CREA, in a statement.

The average selling price of a home across Canada jumped to C$678,091 ($543,429) in February, up 25% on the year and up 9.1% on the month.

Listings rebounded in February from January, but the national sales-to-new listings ratio is still the second highest on record, CREA said.

The group revised up its sales forecast for 2021 to 700,000 units from a previous 583,635 forecast in December. Seasonally adjusted sales activity is currently running at an annualized pace of 783,636 units, it said.

Canada's red-hot housing market is spurring comparisons to earlier bubbles and prompting calls for cooling measures, but policymakers are unwilling to intervene for fear of undermining the economic recovery from the COVID-19 pandemic.