The Canadian housing market racked up another win in November, logging its ninth straight monthly increase in sales after struggling mightily through much of 2018 and early 2019.

The November sales data, released today by the Canadian Real Estate Association, was a welcome sign of the ongoing turnaround the Canadian market has experienced this year.

As BMO Chief Economist Douglas Porter put it, “Canada’s housing market is ending 2019 in a very different spot than where it began the year.”

In commentary published today on the CREA data, Porter noted that home sales have returned to levels comparable to the 2015 to 2017 period before the federal government tightened up the mortgage stress test, a policy change that moved many buyers firmly to the sidelines.

Now with the market-dampening effects of the stress test apparently having run their course, home sales are continuing their march upward, helped along by low mortgage rates and a strong labour markets in many major cities.

There’s an important catch to all of this seemingly good housing market news — as sales climb higher each month, new home listings are on a steady decline. This means that after enjoying many months of setting the terms for the market, homebuyers are likely going to see their power diminished in the new year.

“That may not be the case for all regions, but for the majority of cities it appears that sellers will be back in charge in 2020,” wrote Porter. “With the Bank of Canada more biased to cut rates than raise them, and Ottawa spying ways to juice the market, it doesn’t look like policy is going to stand in the way.”

Porter’s comment about Ottawa’s attempts to “juice the market” refers to the Liberal government’s First-Time Homebuyers’ Incentive introduced earlier this year partly to offset the challenges that first-time buyers were experiencing as a result of the stricter mortgage stress test. With the Liberals holding onto power in October’s election, most expect that their new minority government will continue to expand this program, leading to more buyers entering the market in 2020.

While policy moves like these help buyers purchase homes, they don’t do much to help move the needle on the supply side of the market. Porter also noted that an indicator for evaluating whether the market is in buyer or seller’s territory — months of housing inventory on the market — is sitting at a 12-year low at the national level.

With the housing market’s velocity continuing to accelerate and no end in sight to this stubborn dearth of listings, the Canadian housing market may be firmly planted in seller’s territory for the better part of 2020.

Sellers Will Be Back in Charge of The Canadian Housing Market Next Year by Sean MacKay | Livabl