Canada’s national housing supply is at the lowest levels seen in 12 years, according to the Canadian Real Estate Association (CREA).There were just 4.2 months of inventory left across the country at the end of November 2019—the lowest level recorded since the summer of 2007 and far below the long-term average of 5.3 months. This means if sales continue at their current pace, all housing stock will be liquidated in just over 4 months.“Home prices look set to continue rising in housing markets where sales are recovering amid an ongoing shortage of supply,” said Gregory Klump, CREA’s chief economist. “By the same token, home prices will likely continue trending lower in places where there’s a significant overhang of supply, perpetuated in part by the B-20 mortgage stress test that continues to sideline homebuyers there.”Sales are going strong with transactions up 11.3% year-over-year. Most Canadian major urban centres in Ontario, British Columbia and the Maritime provinces posted an increase. The Prairies are the only markets suffering from an oversupply of homes, built during oil boom times.It’s a basic case of supply and demand: if prospective buyers maintain or increase their demand for property and if prospective sellers continue to shrink or sit on their listings, then housing prices will rise. Continue reading HERE
