Through our global network of real estate affiliates, I have the pleasure of attending many informative and big picture market presentations. A recent one that I attended featured a senior economist with the Canadian Real Estate Association (CREA). In the meeting, we were given an overview of the Canadian housing market in the year 2021. It was an eyeopener to say the least.
The key takeaway, at least for me, is that housing supply shortages are not a regional issue. In fact, if you combined all of the Canadian MLS systems, on New Year’s Day, there were fewer than 100,000 homes for sale in the entire country. That is the lowest total on record and represents roughly a 2-month supply of housing supply.
For context, a balanced market is between a 4 to 6-month supply. A two-month supply is an extremely strong seller’s market. As a result, we’re seeing upward pressure on pricing across the board, with annual inflation exceeding 30% in areas like Woodstock and Kitchener, and nearly 20% in Montreal and Moncton.
Simply put, there is not enough housing to satisfy the demand for home ownership in this country at this time. And it’s doubtful this will change anytime soon. Remember, immigration has been virtually shut down due to Covid-19, so sales have been largely fueled by local buyers. Just imagine what will happen when we resume immigration to Canada.