A for sale is sign is displayed in front of a house in the Riverdale area of Toronto on Wednesday, September 29, 2021. THE CANADIAN PRESS/Evan Buhler

The Canadian Real Estate Association says annual home sales reached a new high in 2021, eclipsing the previous record set in 2020 by about 20 per cent.

The association said Monday that about 667,000 residential properties changed hands in 2021, about 30 per cent more than the 10-year average.

However, home sales in December were little changed from November and were coupled with a dearth of properties on the market that was so extreme that CREA senior economist Shaun Cathcart called it a record low.

New listings for December fell 15 per cent to 28,550 from 33,606 at the same time during the prior year.

TD Economics economist Rishi Sondhi said listings have not kept pace with sales.

"In fact, the number of homes newly listed last year was below levels that generally prevailed before the pandemic struck," Sondhi wrote in a note to investors.

"It could be that a lack of supply is perpetuating itself, in that potential sellers who would be more active in 'normal' times are holding back their listings due to a dearth of inventory to relocate to, and intense competition for available properties."

The lack of properties available weighed on sales, which rose by only 0.2 per cent on a seasonally-adjusted basis between November and December.

On a non-seasonally-adjusted basis totalled 35,971, down nearly 10 per cent from 39,940 in December 2020.

Sales were down in part because buyer fatigue was setting in towards the end of the year, said Cailey Heaps, a Toronto broker.

"Several buyers found the competitive bidding situation discouraging and chose to pause their search, but have now come back with renewed interest," she said, in a statement.

Sondhi believes some of the "froth" will come out of sales this year as interest rates, which were dropped significantly throughout the COVID-19 pandemic, likely rise. However, he believes the urge many buyers have to act now rather than later will sustain sales above pre-pandemic levels.

That could translate to little reprieve for homebuyers hoping to shell out less on a property.

The national average home price hit $713,500 last month, up almost 18 per cent from the previous December.

Excluding the Greater Vancouver and Greater Toronto Areas — two of Canada's most active and expensive housing markets — from the calculation cuts more than $150,000 from the national average price.

In the GTA alone, the average price was above $1.1 million, up about 24 per cent from $932,004 last year.

In the Greater Vancouver Area, the average price was more than $1.2 million, up 15 per cent from about $1.1 million the year before.

CREA found year-over-year price gains were still in the mid-to-high single digits in Alberta and Saskatchewan, but reached about 12 per cent in Manitoba and 30 per cent in Ontario.

Greater Montreal’s year-over-year price growth remained at a little over 20 per cent with the average price in December hitting $527,600, while Quebec City had half that growth and an average price of $303,700.

Price growth was at 11 per cent in Newfoundland and Labrador and more than 30 per cent in New Brunswick.

"With interest-rate pull-forward behaviour keeping demand so strong, and supply struggling to keep up, its little wonder why prices are continuing their relentless upward march," Sondhi said.

"However, while prices will likely increase this year, higher interest rates should slow the rate of increase."

This report by The Canadian Press was first published Jan. 17, 2022.

News from © The Canadian Press, 2022