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Even with a global pandemic the 2020 Canadian real estate market had a record year. Do you want to know how much you can qualify for? Contact us Client First Mortgage Solutions today! We have access to the widest variety of lenders, to find the right solution for you. We are experts at helping you build a plan to move into your dream home. We can’t wait to hear from you!
Where do prices go from here?
The year ended with the seasonally adjusted MLS Home Price Index up 13% year-over-year with the average house price surpassing the $600,000 mark.
Will prices finally fall? Will they moderate and return to more sustainable growth? Or is it still full steam ahead? These questions have not been easy ones to answer.
Below are some predictions from industry professionals.
Canadian Real Estate Association (CREA)
“(We are) anticipating healthy housing price growth in 2021, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.”
Canadian Mortgage and Housing Corporation (CMHC)
“The range of estimated losses in mortgage loan insurance for the 10-year period between 2020 and 2029 is between $3.61B and $15.30B…The shape of recovery and the availability of government support will determine the economic outcome…Our models indicate that the impact of the risks may vary based borrower’s geographical location, type of employment as well as dwelling type.”
Royal Lepage
“Across the country, a large number of hopeful buyers intent on improving their housing situation were not able to find the home they were looking for this year, as the inventory of properties for sale came nowhere near to meeting surging demand. With policy-makers all but promising record-low, industry-supportive interest rates to continue, we do not see this imbalance improving (this) year. The upward pressure on home prices will continue.”
RE/MAX
“(We are) anticipating healthy housing price growth in 2021, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.”
RBC
“We see little will stop activity or prices from reaching new heights in the year ahead…Yet we also expect cooling signs to emerge, which will come into fuller display in 2022. The main restraining factors will be a lack of supply, waning pandemic-induced market churn, a modest creep-up in interest rates and an erosion of affordability. Call it a 2022 soft landing.”
TD
“Canadian prices will likely drop through the fist half of 2021 by around 7%, before regaining some traction later (in the) year. While this sounds like a big hit, it would still leave the upward trend in prices, established prior to the pandemic, in place. Some added pressure on prices could emerge on the supply side. Case in point, the end of mortgage deferral programs is likely to spark some additional supply on the market.”
National Bank of Canada
“We were pleasantly surprised by the performance and house prices so far during the pandemic. Although in our forecasts, particularly in the pessimistic case, we don’t assume strength in the housing market. I think for the macroeconomic scenarios, and that which goes into generating our allowances, you can consider those scenarios quite prudent.”
BMO
“We expect the market to lose some momentum in the months ahead, as tighter mobility restrictions, the small back-up in the long-term yields, the ongoing absence of immigrants, and still-soft employment conditions will weigh. To be clear, we don’t look for a reversal in the broader (housing) market, just some moderation from (December’s) extraordinary results. After all, ‘stay at home’ doesn’t translate to ‘don’t buy a home’.”
Scotiabank
“The delay of some activity into H2-2021, when we had already expected widespread inoculation to lift economic growth, likely means stronger second-half activity than we previously anticipated. Rock-bottom interest rates, ongoing federal and provincial fiscal supports, and the current supply-demand tightness should also contribute to home price gains over the medium-term.”
Original Article – Canadian Mortgage Trends
