The latest statistics from the Canadian Real Estate Association are stark but they should not be surprising. April sales hit a 36-year low, down nearly 57% from a month earlier and down almost 58% year-over-year.
As with March, though, average prices remained steady. Compared to a year ago the national average dipped 1.3% to just over $488,000. With Toronto and Vancouver taken out of the calculation the national average drops by nearly $100,000.
CREA points out that its composite Home Price Index shows an increase of almost 6.5% YoY.
The association is not offering any forecasts on sales or prices going forward.
As the COVID-19 pandemic continues to run roughshod through the housing market, the Bank of Canada is repeating its concerns about high household debt. The Bank sees the number of vulnerable households – those that put more than 40% of their income toward debt payments – increasing and falling behind on loan payments.
Calculations by the BoC indicate that up to one-in-five home-owning households do not have enough money to cover two months of expenses. One-third do not have enough to cover four months. Some 700,000 households have received deferrals, so far.
The central bank’s projections see the mortgage arrears rate climbing by about 0.8%, peaking next year when payment deferral plans offered by lenders start to expire. This is the Bank’s current, worst case scenario. The current mortgage arrears rate stands at just 0.2%.