The Canadian Real Estate Association predicts that by 2021, the national average house price will rise by 9.1% to 620,400 Canadian dollars, which is one of the most optimistic forecasts for the real estate industry to date.
The American Real Estate Association stated that it is expected that the economic improvement brought about by the trough of the COVID-19 pandemic will keep house prices in all regions of the country stable or rising.
The report said: “Strong demand, especially for larger single-family homes, will drive up average prices as potential buyers compete to buy the most desirable real estate.”
The organization of over 130,000 real estate agents is optimistic about this, as the industry tries to understand the hotness of the real estate market in the context of continued unemployment and the uncertain end date of the second wave of the COVID-19 pandemic.
Re/Max predicts that prices will rise by 4% to 6% in 2021, while roommate seller Royal LePage believes prices will increase by 5.5%.
At the same time, debt market observers have a wider range of estimates.
For example, Ratehub believes that house prices will rise by 4% to 7% next year. But this does not include the apartment market. With more Canadians commuting to get off work for home office and school space, apartment sales have not grown fast this year. Fitch Ratings expects house prices to fall by 3% to 5% next year and predicts that due to unemployment making housing unaffordable, borrowers may default on mortgages.
However, CREA’s forecast pointed out that after the plummet of home sales this spring, the real estate market not only rebounded to a record high in the summer but also continued the multi-year trend of short supply.
The report said: “In the past few years, record-setting international immigration, low-interest rates, and the increasing proportion of millennials entering the era of home buying have made the housing market an important force in the Canadian economy.”
“The recent government support program for individuals and businesses has also helped the entire economy through the worst part of the disease so far.”
Entering 2021, CREA stated that it would sell more homes, although monthly home sales may fall back to more typical levels than the crazy fluctuations in 2020. Overall, CREA predicts that house sales in 2021 will increase by 7.2% to around 584,000.
The report also pointed out that mortgage interest rates are expected to remain low next year to support borrowing.
CREA did state that it expects a shortage of new listings next year to limit sales activities in Ontario, noting that prices in the Prairie region, Newfoundland and Labrador are not as high as those in British Columbia and New Zealand. The “intensity” seen in Lanzhou and other markets has risen. Quebec.
On the other hand, CREA expects housing prices in Alberta and Saskatchewan, which have experienced price declines for several years, to rebound next year.
The report said: “Current trends and the outlook for the fundamentals of the real estate market indicate that economic activity will remain relatively healthy by 2021.”
The Canadian Press report was first published on December 15, 2020.