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Home sales slowed in October but average price up 15% in past year, CREA says

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The average price of a Canadian resale home has risen by more than 15 per cent in the year up to October, the Canadian Real Estate Association said Monday.

The group that represents more than 130,000 real estate agents across Canada said that October 2020 was the busiest October ever for home sales, continuing a trend that started in May after COVID-19 lockdowns in March and April put the market into a deep freeze.

While sales plummeted in the early days of the pandemic, they have been on fire ever since. Some 56,186 homes changed hands during the month, bringing the total tally of 2020 as a whole to 461,818. That’s the second-busiest 10-month stretch ever.

Sales continued to boom compared to normal levels and prices seem to be doing the same thing.

The average price of a resale home sold on CREA’s MLS system went for $607,250. That’s up by 15.2 per cent compared to last October.

CREA warns that the average selling price can be misleading, since it tends to be skewed higher by sales of expensive houses in places like Toronto and Vancouver, so it puts out another number — known as the Multiple Listing Service House Price Index, or MLS HPI — that adjusts for market size and type of home.

The MLS HPI rose by 10.9 per cent in the year up to October. That’s the fastest annual increase in more than three years, dating back to July 2017, before the government implemented stress-test rules aimed at slowing down the market.

“Anyone waiting for the Canadian existing home market to begin to settle down following this summer’s surprisingly strong recovery, they’re going to have to wait a little longer,” CREA chief economist Shaun Cathcart said.

“It was evident that the same trends we’ve been seeing since July — record sales and record prices amid tight overall supply — was once again the story in October.”

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