Smaller cities share in home sales boom
March 26, 2021
Halifax home for sale. | Zolo
While Toronto and Vancouver grab the housing headlines, higher sales of homes and prices are also being seen in smaller markets right across the country, according to the Canadian Real Estate Association (CREA).
Here are three recent examples:
In Nanaimo, B.C., detached housing sales in February 2021 soared 56 per cent from the same month a year earlier to 417 houses, and the average price was up 23 per cent to $747,413.
In Saskatoon, home sales were at 352 units—up 53 per cent in February 2021 compared to a year earlier— and benchmark home prices rose 10.1 per cent, year-over-year, to $330,100.
The Nova Scotia Association of Realtors said the number of houses sold in February rose 31.9 per cent from February 2020, while average prices rose 30.4 per cent to a record high of just over $340,000.
According to CREA, about 85 per cent of local markets in February were seller s’ markets, meaning sales were above long-term norms compared to new listings.
The higher sales and prices are not all good news for smaller communities, suggests Robert Hoque, a senior economist with RBC, the largest mortgage provider in Canada.
“It puts a lot of pressure on affordability locally and that I think it is going to be quite a challenge going forward,” Hoque said. “This is no longer just a big city kind of Toronto, Vancouver story, this is a small-town issue now.”
He said a potential catalyst to cool the market could be interest rates rising from their current rock-bottom levels, or possibly government measures aimed at reducing activity.
“It's not entirely clear what they can do but certainly there's pressure there,” Hoq ue said.