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16 Jul

Home sales continued to rebound in June after pandemic freeze earlier this year

COVID-19

Posted by: Frederic Pichette

Published Wednesday, July 15, 2020 9:35AM EDT
Last Updated Wednesday, July 15, 2020 11:11AM EDT

 

OTTAWA — The Canadian Real Estate Association says home sales continued to rebound in June after plunging earlier this year due to the pandemic.

The association said Wednesday that sales in June were up 63 per cent on a month-over-month basis, while the number of newly listed properties climbed 49.5 per cent from May to June.

Compared with a year ago, sales in June were up 15.2 per cent.

The actual national average price for homes sold in June was almost $539,000, up 6.5 per cent from the same month last year.

The real estate industry came to a near standstill earlier this year as non-essential businesses closed to help slow the spread of the COVID-19 pandemic.

CREA said the jump in sales returned them to “normal levels” for June, noting they were up 150 per cent from where they were in April.

But while it may be hitting “normal levels,” the overall market is “obviously not back to normal at this point,” said Shaun Cathcart, CREA’s senior economist.

“The market has recovered much faster than many would have thought, but what happens later this year remains a big question mark,” said Cathcart in a statement.

“That said, daily tracking suggests that July, at least, will be even stronger.”

Though the numbers, at a glance, appear to suggest there was not “anything amiss in the economy whatsoever,” BMO chief economist Douglas Porter said the housing market now must keep up its momentum.

Porter said that looking further out, the market will have to balance slowing immigration levels, low interest rates and short housing supply — creating a “tension” with “lasting scars from the shutdowns.”

“Home sales, prices and starts have effectively regained all the ground lost during the shutdown,” Porter wrote in a note to clients.

“However, fair point that some of this outsized strength is simply pent-up demand for the lost sales from the key spring season.”

This report by The Canadian Press was first published July 15, 2020

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