Winter is traditionally the slowest season in the real estate market. They are not conducive to home sales or purchases. However, for the year 2021, this is not the case. The hot spring market has already begun, even though we are just a few months into the year!
We have got you covered if you are thinking about buying but not sure about where to begin. Here is what experts in real estate and housing want you to know about the real estate sector in Canada in 2021.
What will the real estate market in Canada look like in 2021?
The average Canadian house price increased 17% year over year in 2020. Realtors expect that the market for sellers will continue this year, with a minimal price increase. How the numbers will turn out depends on the number of homes placed on the market in the coming months.
Is now a good time to purchase a condo?
Condo demand in major cities such as Toronto, Vancouver, and Montreal fell majorly last year. As people moved to the cheaper suburbs, tenants gave up their leases to return home. Also, the demand for Airbnb is sluggish as fewer international students needed housing making the inventory flood the market.
The condo market in Toronto, which fell 8.5 percent last October, is steadily returning to pre-COVID levels, but there is still a lot of inventory on the market.
Excess inventory means if you are trying to buy one, you may get a great price. It will make the prices return to “natural” when people can move freely and travel again in the post-Covid era.
So, it seems there will be no housing crash as expected.
According to experts, the demand will remain solid. The chief economist of a federal housing agency, Canada Mortgage and Housing Corporation (CMHC), believes rates will continue to fall in 2021 because current demand is unsustainable in the COVID-weakened economy.
What about the mortgage rates?
Finally, some encouraging news! Low-interest rates of less than 2% in the second half of 2020 are unlikely to change this year.
If you already own a house, now could be a great time to refinance to get a lower interest rate. The Royal Bank of Canada expects interest rates to remain modest. However, it suggests “long-term rates will creep slightly higher.”
This spring has been quieter than predicted
Before COVID-19 was declared on March 11, the spring real estate market was set for a record-breaking sales season, particularly in Canada’s largest cities. The Canadian Real Estate Association reported that year-over-year sales in February increased by 27% across the country, suggesting that the busy spring buying season had begun early.
We expect market activity to slow down despite the strong start as buyers and sellers can reach a standstill. Buyers may decide to put off their home purchase because of uncertain health and economic circumstances. However, the sellers may be reluctant to accept a lower bid today after seeing what others received for their properties in the late winter months.
Those that do not have immediate real estate needs will undoubtedly remain on the sidelines for the time being as the situation develops.
The fundamentals of the market do not change pent-up buyers. Demand has been slowing building, and the supply of homes for sale remains scarce.
The limited inventory available and population growth in major cities of Ontario, such as Toronto. We would expect market activity to restart and rebound quicker once the health risks from COVID-19 mitigates and the financial markets have normalized.
However, we may expect real estate prices to be affected as people respond and adjust to ongoing directives from local, provincial, and federal governments.
Thus, to conclude, the above article sums up a brief guide on the Mortgage market of Canada.