Records fell in the Canadian housing market again in September.
But COVID-19 isn’t the only thing to blame on the high home prices, according to the Canadian Real Estate Association.
Numbers just released by the CREA show that both home prices and home sales went up again last month.
Sales in September went up almost 46 percent compared to September last year, and the prices of homes went up 17.5 percent during the same period.
Shawn Cathcart is the senior economist with the CREA and he says the current housing market is not caused by COVID-19, but by the steady decline in home inventory on the market over the past 5 years.
“Heading towards records and record type conditions was something that we had already expected for 2020. It didn’t happen in the spring obviously. We’re seeing it show up now,” says Cathcart.
He says after years of inventory being between 12 to 13 months in Nova Scotia, that inventory has been dropping since 2016, and is now down around 3 to 4 months.
Inventory is calculated by taking the number of homes on the market, and the average time it would take to sell all those houses based on sales per month.
The result right now is higher home prices caused by high demand, and short supply, says Cathcart.
“There’s a ton of household formation demands for housing and not enough building, and so it’s not surprising that all this inventory is being absorbed,” he says.
And according to Cathcart, because this trend of low inventory has been years in the making, there is no immediate end in sight.