Home sales activity crashed last month, but here’s why property prices will not — for now

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The federal government’s income and wage subsidy programs appear to have kicked in and homeowners aren’t being forced to sell — yet

Canadian real estate sales activity was predictably down in March, as buyers remained on the sidelines and social distancing led to fewer showings.

Canada’s largest markets saw sales plunge as the coronavirus lockdown took hold, with transactions in the Greater Toronto Area down 28 per cent, Montreal contracting 13.3 per cent and Greater Vancouver edging 2.9 per cent lower. Calgary , Edmonton , Winnipeg , Hamilton-Burlington and Ottawa also saw some considerable declines.

But amid buckling sales, home prices managed to inch up from last month. CREA’s home price index rose 0.8 per cent in March compared to February, marking its 10th consecutive monthly gain. Over the past 12 months, average Canadian home prices have risen just under 7 per cent. “Contrast that to 2008/09, when sales fell by almost 40 per cent from the end of 2007 to the 2009 lows, but new listings rose by 15 per cent through the early stages of that period — that’s how you get a quick and meaningful decline in prices.”

 

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