A 30% jump in housing sales, and why aren't we celebrating?
The housing markets in Canada are on the mend. Housing sales in October were a remarkable 30% higher than last year's. Month-over-month, sales in October were up 7.7% compared to September, signalling renewed activity in the market.
By most accounts, housing markets have turned a corner. As Phil Soper , President of Royal LePage, suggested, 2025 could shape up to be a strong year for real estate.
That said, not all local markets are thriving. For instance, Toronto's new condo market continues to face significant challenges. However, the aggregate national picture appears more encouraging.
The recent interest rate cuts seem to have played a role in this recovery. While the cuts themselves may not have drastically increased affordability for buyers, they signal a broader trend: the possibility of further rate reductions in the future. This expectation has likely nudged prospective buyers off the sidelines and into the market.
The housing market recovery may still face hurdles, but the signs are pointing in the right direction for now.
This does not suggest that we will see a return to the bidding wars of the past this year or the next—a scenario that was both unsustainable and deeply disadvantaged new homebuyers. Instead, Canada needs a healthy housing market characterized by moderate, sustained growth in prices and sales over time. Such stability is vital for both current homeowners and those aspiring to enter the market in the future. Remember, when housing prices fall or are stagnant,
Remember, when housing prices fall or stagnate, smart homebuyers stay away from acquiring assets that lose value over time. Hence, a healthy housing market is one where a moderate increase in sales and prices is sustained.
I disagree with this, very much so. I think the prices of housing should come down as technological capacity, workforce capacity and workforce productivity rises, we should strive towards realizing abundance rather than scarcity. Housing should largely be considered a commodity. But there should also be luxury housing as well, different grades of housing, just like there's different grades and types of oil or meat (bad analogy, but I'm sure you understand). I think household incomes should be invested more so in assets that do more work to enable and uplift economies, perhaps invested in stocks and bonds instead. Who likes the stuff they buy to be more expensive?