According to the latest data released in the RE/MAX Housing Market Outlook Report, a housing shortage is keeping home prices high even as the coronavirus wreaked havoc on the economy. The average price of a single-family home in Canada is expected to rise by 4 to 6 percent in 2021.
Thirty-five percent of Canadian brokers polled by RE/MAX indicated that “move-over buyers,” or those who are coming over from other cities or provinces, will be a significant source of market activity in the coming year while 45 percent argue that the biggest driver of the market will come from “move-up buyers” looking for a larger or better home.
“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” Christopher Alexander, executive vice president and regional director, RE/MAX of Ontario-Atlantic Canada, said in a prepared statement. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”
As in the United States, where home price growth jumped 7.3 percent in October despite the pandemic-related closures, the Canadian housing market remains strong and Canadians remain confident in its resilience. More than half (53 percent) of those polled by RE/MAX believe that it will remain steady in 2021, while 52 percent believe that real estate is still the best investment going into the future.
According to RE/MAX’s analysis, only 6 percent of Canadians decided to directly list on account of the pandemic while the rest did so for interconnected reasons. Another 40 percent realized that their home is in need of renovations.
Suburbs and cities close to major urban centers, such as Pitt Meadows outside Vancouver and Hamilton outside Toronto, saw the greatest boom of buyers looking to relocate. Urban centers, by contrast, saw a bit of stalling as more space and land became hot commodities for Canadians — 29 percent of those polled said they wanted more of it.
“The urban-to-suburban buyer interest in Ontario has impacted Toronto’s downtown core, specifically for condos, which is currently a buyer’s market,” reads the report. “Supply levels throughout Toronto are continuing to drop and are not expected to improve in 2021, which will impact average home prices.”
In general, densely populated cities are the only parts of Canada seeing a turn to a buyer’s market while suburban and rural areas are seeing the biggest spikes they’ve seen in years. RE/MAX predicts that this type of demand will continue well into 2021 and the future, as the pandemic pushes many to reconsider what they want and move into the type of housing they’ve long been thinking about.