A Canadian real estate brokerage Royal LePage report says that in 2021, home prices will rise by 5.5% ($746,100). This rise is based on the unmet demand in 2020 that is going to roll over to 2021. Re/Max presented a similar forecast, which expects the home prices to rise by 4-7%, in 2021.
While government-backed mortgage insurer Canadian Mortgage and Housing Corporation predicted that the prices are going to decrease. According to some of the biggest banks of the country, muted growth will be seen.
Phil Soper, Royal LePage Chief Executive, forecasts that the upward tension on home costs will proceed, upheld by the absence of supply to satisfy flooding need and as policymakers guarantee to keep interest rates at a record low. Canadian Real Estate Association says that average home prices in Canada, hiked by 15% in October than the previous year making its all-time high.
Re/Max says that 84% of brokers expect an 84% increase in home selling as people are considering to change their lifestyles by shifting to less dense areas of the cities. Roya LePage also reported a similar trend, predicting that single-family houses outside the city core areas are becoming core interest of people. An increase of 6% ($890,100) and 2.25% ($522,700) could be seen the median prices of two-storey detached houses and median condominium price respectively, Royal LePage said. This difference would be driven by Canadians’ urge to buy larger homes, baby boomer retirement, and demographic trends.
Bank of Nova Scotia and Lenders Royal Bank of Canada in their fiscal 2020 annual reports said that in the upcoming 12 months, house prices would increase by 0.4% and 0.6%, referring to the economic uncertainty that prevailed due to COVID-19 and condominium market’s weakness. The group said that apartment suite demand is relied upon to be sound in the majority of Canada’s greatest urban areas, apart from Toronto, where softer interest is seen proceeding in the downtown area.
It is expected that with increments of 9% and 11.5% individually, Vancouver and Ottawa will lead the country, while Calgary and Edmonton are set to slack with development of 0.75% and 1.5%. Toronto prices are expected to rise by 5.75%.
Re/Max forecasted that Vancouver’s suburban surrounding areas, including Maple Ridge, Pitt Meadows, and Ladner, will be the best performers referring to the large space availability and affordability. Halifax may see an influx in home prices due to move-up buyers and out-of-province buyers having retirement or work from home plans. Regarding Ottawa, Burlington and, Hamilton, an increase in prices is expected driven by “luxury” buyers.
Both brokerages, Royal Lepage and Re/Max suggested a momentum in the real estate market; however, everyone doesn’t agree to it. A Fitch Rating report states that home prices in Canada will decrease by 3-5% and they’re not going to recover before 2022. It said that 0n 2021, there will be a rise in unemployment, mortgage stress tests, and a decrease in housing affordability and immigration. Fitch report said a decline in renting prices would make homeownership less captivating due to payment holidays and government support.
However, Royal LePage’s payment deferral analysis has a piece of good news as they conclude that ‘‘The concern regarding the impact of potential mortgage defaults related to mortgage deferrals during the summer has eased significantly as many Canadians who deferred payments have begun repayment.’’