Blowing past predictions from Canada’s housing agency, July home sales in Canada hit the highest level in history with a 26% increase from a year earlier.

For the third month in a row, transactions were up on a month-to-month basis across the country, reports the Canadian Real Estate Association (CREA), with new listings also setting an all-time high.

Among Canada’s largest markets, sales rose by 49.5% in the Greater Toronto Area, 43.9% in Greater Vancouver, 39.1% in Montreal, 36.6% in the Fraser Valley, 28.7% in Ottawa, 15.7% in Calgary, 12.1% in Winnipeg and 9.7% in Edmonton.

The 62,355 transactions recorded in July 2020 marked the highest monthly sales figure on record going back more than 40 years, according to CREA data.

“With more and more of regular everyday life opening back up, Realtors and their clients across Canada are making up for lost time, and it’s been a very busy summer as a result,” said Costa Poulopoulos, chair of CREA.

Record low mortgage rates are seen as a key driver of housing sales.

On August 14 the Bank of Canada lowered its five-year conventional mortgage rate from 4.94% to 4.79%, the second rate cut since May.

But actual rates are much lower.

HSBC Canada, Canada’s seventh largest bank, is offering a five-year, fixed rate mortgage of 1.89% as of August 14, available for 120 days.

The current lowest five-year rates from Canada’s big six banks, on August 14, were 2.19% at Royal Bank of Canada, Scotiabank and CIBC, according to RateSpy.

The number of newly listed homes climbed by another 7.6% in July compared to June. New supply was up in about 60% of markets.

The sales activity is far outpacing the recovery in new supply, as the national sales-to-new listings ratio tightened to 73.9% in July compared to 63.1% posted in June. It was one of the highest levels on record for this measure.

According to CREA, there were just 2.8 months of inventory on a national basis at the end of July 2020 – the lowest reading on record for this measure.

The national average price for homes sold in July 2020 hit a record high of $571,500, up 14.3% from the same month last year.

When Greater Toronto and Metro Vancouver, the two most expensive housing markets in the country, are excluded, the average price falls to around $454,000.

In Calgary, for example, the average home price is now $411,200 and the average price in Regina, Saskatoon and Winnipeg is less than $300,000.

The sizzling housing market is in stark contrast to dire warnings from Canada Mortgage and Housing Corp. The federal housing agency has consistently forecast a sharp drop in housing sales and prices across Canada since the COVID-19 pandemic was declared in March.

Canada Sees July Home Sales Hit Highest Level in History by Frank O’Brien | BIV