The Canadian Real Estate Association is predicting home sales will be so strong they'll reach record highs this year, before starting to cool in 2022.
The association said Monday that it expects nearly 702,000 properties to change hands through Canadian MLS systems this year, up from the 551,262 recorded in 2020, while sales for 2022 are expected total 614,000.
CREA believes the national average home price will rise by 16.5 per cent on an annual basis to just over $665,000 in 2021 and $679,341 in 2022.
CREA's heated predictions show COVID-19 has not spooked buyers, who have waded into expensive markets even as layoffs are plentiful and unemployment high. Throughout the second half of 2020 and the start of 2021, realtors reported bidding wars and high numbers of offers for suburban homes or properties that need renovations.
CREA doesn't believe those trends will dissipate soon.
"At this point everyone knows how far the current monthly sales numbers are from historical norms, and that they have been setting record after record for eight months now, so this should not be a surprise,” CREA chair Costa Poulopoulos said in a statement.
The new outlook came as CREA reported Monday sales in February totalled 58,021, a 6.6 per cent jump from January and a 39.2 per cent increase from the 40,550 units sold in February 2020.
The actual national average home price in February was a record $678,091, up 25 per cent from $542,484 a year earlier.
February was a "super competitive" month, said Cody Skrzypkowski, a realtor with the Keller Williams Real Estate Associates North Group in Toronto.
It's now normal for him to see condos priced at under $800,000 receiving multiple offers and he's noticing the appreciation on many properties is rising by double digits within a month or two.
"I've never seen pricing like this in my career," said Skrzypkowski.
Those price jumps aren't just reserved for traditionally hot real estate markets like Toronto or Vancouver, said CREA.
The largest year-over-year gains — above 35 per cent — that CREA reported came from the Lakelands region of Ontario cottage country, Tillsonburg District and Woodstock-Ingersoll.
Price hikes in Hamilton, Guelph, Cambridge, Brantford, Kitchener-Waterloo, Peterborough hovered between 25 and 30 per cent, but increased by 18.8 per cent in Montreal and by between 10 and 15 per cent on Vancouver Island, Winnipeg, the Greater Toronto Area and Quebec.
A spike between five and 10 per cent came in Greater Vancouver, Victoria, Regina and Saskatoon and prices shot up by 3.5 per cent in Calgary and Edmonton.
Costa and CREA senior economist Shaun Cathcart blamed COVID-19 and supply for the conditions.
"We are right at the start of the first undisturbed (by policy or lockdown) spring housing market in years and we also have the most extreme demand-supply imbalance ever by a large margin," said Cathcart in a release.
He believes demand is building because of regulatory changes in the years leading up to COVID and because people now see the need to have a home to ride out the pandemic. Many also want to make a purchase before prices climb any higher and while mortgage rates remain at record lows, he said.
Both CREA and Skrzypkowski believe supply will slowly return to the market, but it will take some time to cool conditions.
Skrzypkowski said, "If you're a seller, congrats. If you're a buyer, buckle up because it may not be the most easy process for you."
This report by The Canadian Press was first published March 15, 2021.
Tara Deschamps, The Canadian Press