The aggregate price of a Canadian home will jump by 16% year-over-year in Q4-2021 amid voracious demand, according to Royal LePage’s House Price Survey.
The aggregate price of a home in the country is expected to reach $771,500 by the last quarter of the year, and while appreciation will slow, demand will remain elevated because foreign students, newcomers and investors will have arrived. In Q2-2021, the aggregate price of a Canadian home jumped by 25.3% year-over-year to $727,000.
Greater Toronto Area
The aggregate price of a home in Canada’s largest metropolitan region increased by 18.2% year-over-year last quarter to $1,035,000, with the single-family detached segment rising by 28.2% to $1,301,000, and condos increasing by 8.6% to $630,000. In the City of Toronto, the aggregate price of a home rose by 8.3% year-over-year in Q2-2021 to $1,115,000, with single-family detached homes increasing by 14.8% to $1,550,000 and condos climbing by 5.8% to $695,000.
Royal LePage attributes the exorbitant valuation increases to a “chronic housing supply shortage,” for which there’s no solution in sight. Although market activity is expected to be slow during the summer, in-person learning in post-secondary institutions, and the renewals of tourism and immigration will conspire to push demand, and by extension prices, skyward. The report anticipates downtown Toronto will return to its pre-pandemic vibrancy, but it also warns that City Council’s intention to raise the municipal land transfer tax for purchases over $2 million could aggravate the shortage of housing inventory.
Royal LePage forecasts the aggregate price of a home in the GTA will rise by 14.5% year-over-year in Q4-2021.
Greater Montreal Area
The second-largest metropolitan area in Canada saw home prices rise by 21.7% last quarter over Q2-2020 to $514,000. Single-family detached homes in Montreal increased by 25.5% in Q2-2021 to $559,000, while condos rose by 14.1% to $405,000. Montreal Centre’s aggregate home price rose by 14.3% year-over-year in Q2-2021 to $643,000, with the median price of a single-family detached home surging by 24.3% to $1,050,000, and the condos increasing by 9.3% to $500,500.
While the rate of appreciation will remain high through 2021, Royal LePage believes prices have already peaked. One reason is, thanks to the spiking COVID-19 vaccination rate, Montrealers have resumed travelling and generally enjoying their summers. The report also stated that prospective first-time homebuyers appear to have taken a break in the hopes that competition won’t be as ferocious in six to 12 months. Royal LePage forecasts that the aggregate price of a home in the region will increase by 17.5% year-over-year in Q4-2021.
Greater Vancouver Area
The aggregate price of a home in Canada’s most expensive metropolitan area rose by 19.6% year-over-year to $1,202,500 in the second quarter of 2021, with single-family detached homes rising by 24.9% to $1,625,000 and condos rising by 9.4% to $700,000. In the City of Vancouver, the aggregate price of a home increased by 11.5% to $1,305,000, with single-family detached homes going up by 14.6% to $2,350,000 and condos climbing by 4.4% to $774,000.
In the metro region, inventory appears to be increasing and demand moderating, although that is likely a confluence of buyer fatigue and people enjoying their summers. Nevertheless, it remains a seller’s market, the report noted, with fierce competition among buyers. Demand is especially strong in the single-family detached market, where move-up buyers are desperately trying to climb the housing ladder.
Royal LePage forecasts that the aggregate price of a home in the Greater Vancouver Area will rise by 15% year-over-year in Q4-2021.