Canadian Home Sales Continue Their Momentum To Start 2021

Christine MacPherson • February 19, 2021

In January, Canadian home sales increased 2.0% month-on-month, building on December's 7.0% gain. On a year-on-year basis, they were up 35.2%.

Provincially, sales were up in 8 of 10 provinces in January, with strong gains recorded in PEI (+20.5% m/m) and Alberta (+11.9%). On the flipside, a relatively steep decline was recorded in Nova Scotia (-8.3%).

New listings dropped by 13.5% m/m in January. The combination of rising sales and falling new listings brought the months supply of inventory measure to under 1.9 months.

The national sales-to-new listings ratio also increased to 90.7% – its highest level by far. Every province was in sellers' territory in December, and many of those in the eastern part of Canada had ratios over 100% (Quebec: 128.3%; New Brunswick: 116.0%; Nova Scotia: 114.3% and PEI:101.5%). This means that there were more sales than new units listed last month in these provinces. This is a rare situation, but has occurred before in the Atlantic Provinces. However, January marked a first on this front in Quebec. Elsewhere, ratios were particularly elevated in Manitoba (86.1%) and Ontario (88.6).

Strong demand and historically tight conditions were reflected in prices. Indeed, Canadian average home prices surged by 4.7% m/m in January. On a year-on-year basis, they were up 22.8%, marking an acceleration from December. However, prices were up in 8 of 10 provinces during the month, with the largest gains occurring in Alberta (+8.1%) and Ontario (7.4%).

Compared with the average sales price, the MLS home price index, a more "like for like" measure, increased 2.0% m/m. Single family home prices rose 2.6% m/m (and a robust 17.4% y/y), whereas apartment prices advanced by a smaller 0.2% m/m (and decelerated to 3.3% y/y). In Toronto, apartment prices increased 0.4% m/m, the first gain in 4 months.

Key Implications

Home sales picked up right where they left off to start 2021. Demand was likely given a lift by ultra-low mortgage rates, which dropped again during the month. January's robust gain coupled with a strong handoff into this year virtually ensures that sales will increase in the first quarter. However, with sales likely running above fundamentally-supported levels, we think some cooling in activity will take place, especially in the second half. A dwindling supply of inventories, when benchmarked against the current sales pace, could also weigh on activity moving forward.

With today's data showing a solid gain in prices last month and new supply collapsing across nearly the entire country, markets were historically tight. This points to further strong price gains ahead in the near-term.

Also notable was that benchmark condo prices grew for the first time in several months in Toronto. Although supply remains elevated, conditions are becoming tighter than what we saw last fall. This suggests that further gains are in store.

 

Source: https://economics.td.com/ca-existing-home-sales


SHARE THIS ARTICLE

RECENT POSTS

Is Your Mortgage Pre-Approval Actually Useless? Here’s Why It Might Be

By Christine MacPherson • August 1, 2025
A Rate Hold Isn’t a Guarantee—And That Could Cost You the Home Getting pre-approved for a mortgage should feel like progress. It’s exciting, empowering, and often the first concrete step toward buying a home. But here’s the hard truth: if your mortgage pre-approval wasn’t put together properly—or if your broker or banker skipped key steps—it could be virtually worthless when you need it most. Let’s break down what a pre-approval really means, what a rate hold does (and doesn’t) do, and why experience matters more than ever in a fast-paced, competitive real estate market. What Is a Mortgage Pre-Approval Really ? A mortgage pre-approval generally includes two things: A conditional approval based on the numbers provided by your broker or banker. A rate hold that locks in an interest rate (typically for 90–120 days), giving you time to shop with peace of mind. But here’s the issue: most lenders don’t actually do a full review of your application until it becomes “live”—that is, until you’ve written an offer that’s been accepted. Before that, they’re mostly relying on the information submitted by your broker or banker , not what they’ve verified themselves.

No-Payment Mortgage Options: Are They Right for You?

By Christine MacPherson • April 11, 2025
When people hear “no-payment mortgage,” they often assume it’s too good to be true or that it comes with hidden risks. But in Canada, these options are designed to be conservative and sustainable, giving homeowners more financial flexibility without putting them in a bad financial position. There are three main types of no-payment mortgage options: Reverse Mortgages – Available to homeowners 55+ with significant home equity. Alternative Lenders – Offer similar options regardless of age but require strong equity. Private Lenders – Short-term solutions for homeowners who need temporary relief. Let’s break them down and see if one might be a good fit for you. Reverse Mortgages: Not as Risky as You Think Reverse mortgages tend to get a bad reputation, mostly because of how they were handled in the U.S. years ago. But in Canada, lenders are far more conservative. The biggest difference? Canadian reverse mortgages never allow you to owe more than your home is worth . How Do They Work? You must be 55 or older to qualify. You can borrow a portion of your home’s value , usually up to 55% . The older you are, the more you can borrow —since the lender calculates how long you’re likely to stay in the home. You don’t make monthly payments —instead, the interest gets added to your loan balance over time. When you sell or move, the loan is repaid from your home’s value. Why Can’t You Owe More Than Your Home’s Value? Most lenders offer a no-negative equity guarantee , meaning even if home prices drop, your estate will never owe more than your house is worth. But realistically, Canadian home values have remained stable or increased over time , making it unlikely you’d ever reach that point.
Show More