Danny danforth condos . How can house prices rise next year? Total housing prices in Canada will rise 5.5 per cent year-on-year to C $746.100 in 2021, and the median prices of two-story detached homes and condos are expected to rise 6.0 per cent and 2.25 per cent to C $890100 and C $522700, respectively.
The main reason is that housing demand exceeded expectations in the second half of 2020. The supply of homes for sale has failed to keep pace, pushing up prices and pushing unmet demand from buyers into the New year.
Phil Soper, President and CEO of Royal LePag, said: “the key indicators we have analyzed show that the real estate market will be more beneficial to sellers in the crucial spring of 2021. Across the country, many hopeful buyers who want to improve their housing conditions have failed to find the homes they are looking for this year, as inventory of homes for sale can hardly meet the surging demand. Since policymakers can almost guarantee that interest rates will hit record lows and industry supportive interest rates will continue to exist, we do not think this imbalance will improve in the new year. The upward pressure on house prices will continue. ”
“in 2020, there was a significant shift to large and single-family homes as families converted their homes into offices, school classrooms, gymnasiums and restaurants during the outbreak,” Soper said. “We expect this trend to moderate as life returns to normal in the coming months. It is also worth noting that Canada has welcomed a new generation of first-time home buyers this year, encouraged by lower financing costs and weak demand for downtown apartments. City life still appeals to many people. ”
The value of single-family homes and homes outside major urban markets is expected to continue to exceed that of urban core apartments in the coming year for two reasons: Canadians want to own larger homes as telecommuting becomes more common; second, broad demographic trends, including the retirement of baby boomers (born in 1946-1964). “the general trend before the outbreak is pushing up house prices in secondary markets outside the big cities. Canadian companies are moving to work from home, driven by the epidemic, which only accelerates the relocation model that has already begun, “Soper said. “in the middle of the past decade, a large number of baby boomers began to move to suburban and leisure-style neighborhoods, while millennials, with the same large population, began to leave downtown apartments in search of space as they began to start families.” Soper added that as property prices in the city center become more competitive with rising prices in the suburban and suburban markets, the trend of high demand outside the city center will slowly ease.
As many Canadians who have delayed repayments have begun to repay, concerns about the possible default impact of a summer mortgage extension have eased significantly. As of September 30, 2020, only 5 per cent of loans in the organization’s entire underwriting book were deferred, down from about 8 per cent in August, according to CMHC.