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Canada: A Huge Year for Home Sales
By Benoit P. Durocher, Senior Economist
HIGHLIGHTS
f Existing home sales inched up 0.2% in December.
f They rose in just four provinces, including Ontario (+1.1%).
f Inventory remains very tight. At the current sales pace, there were just 1.6 months of inventory in December—the lowest level since data collection began in 2003.
f The existing home price index climbed 2.5% on the month and 26.6% for the year.
f Sales were up 21.0% in 2021, the biggest jump since 1996.
The average existing home price index rose 22.2% in 2021.
COMMENTS
We saw three different phases of home sales activity in 2021.
The year started out where 2020 left off, with huge sales growth. Transactions hit a record high of 67,219 in March. But with limited inventory and deteriorating affordability, the market couldn’t sustain this red‑hot pace. Sales slowed in April, then stabilized over the summer before edging up slightly in the fall.
Despite the ups and downs, sales ended the year at a relatively high level historically. Strong demand continued to push prices higher, with the existing home price index hitting $811,700 in December, an all‑time high.
IMPLICATIONS
Interest rates are expected to creep up this year, which should cool the market some. But pent‑up demand and buyers who want to get in before rates rise could continue to push prices higher over the coming months.
ECONOMIC STUDIES | JANUARY 17, 2022
GRAPH 1
Sales of existing homes have stabilized
Sources: Canadian Real Estate Association and Desjardins, Economic Studies Canada – Number of existing home sales Units/month
15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000
2016 2017 2018 2019 2020 2021
All-time high
GRAPH 2
Prices of existing homes continued to soar
Canada – Existing home price index In $k
430 480 530 580 630 680 730 780 830
2016 2017 2018 2019 2020 2021 2022
Milliers
Sources: Canadian Real Estate Association and Desjardins, Economic Studies
