Canadian home prices should rise another 5% before the end of 2021, says a new report from RE/MAX.
Perhaps unsurprisingly, single-family detached homes have grown the most in price this year compared to 2020, rising between 6.8% and 27.3% across 26 markets RE/MAX included in its analysis. According to the company’s brokers who participated in the survey, the market segment will continue seeing price gains through the remainder of the year.
“As our brokers and agents predict, the fall market activity is expected to remain steady, which is promising, despite the ongoing challenges presented by the Delta variant,” Christopher Alexander, senior vice president of RE/MAX Canada, said. “This is particularly relevant given the Canadian housing market is often a good indicator of economic activity in the country, and with the Bank of Canada forecasting economic growth of 4.5% in 2022, a strong fall housing market is a good sign that things may be starting to return to a more natural rhythm.”
In Ontario, single-family detached homes experienced price gains that are among the highest in the country, with 13 of 16 regions seeing increases of 20-35.5% year-over-year, says the report. However, Toronto is not one of them—single-family detached homes rose by 14.6% compared to a year ago, followed by Mississauga at 19.7%, and Thunder Bay at 17.1%.
Low housing supply in Vancouver hasn’t been able to keep up with robust demand, but RE/MAX suggests that alternative markets present viable options for many of the city’s frustrated homebuyers. In Edmonton and Calgary, however, local housing affordability, low interest rates and higher purchasing power have put homebuyers in the driver’s seat, and there’s no sign of that trend dissipating this year.
Nanaimo, Victoria and Vancouver have seen home prices grow compared to a year ago by 23%, 19.1% and 16.4%, respectively. In fact, Nanaimo’s condo prices rose by 17.6% year-over-year to $343,713, while its townhome segment surged by 65.8% to $511,549. Edmonton, Saskatoon, Vancouver, Victoria, Winnipeg and Nanaimo will see price gains between 4-9% through the remainder of 2021.
“Housing activity throughout the pandemic has remained strong, so it comes as no surprise that the outlook for the remainder of the year continues on an upward trajectory, which is great for homeowners and their equity, but challenging for first-time buyers who have been priced out of the market,” Elton Ash, executive vice president of RE/MAX Canada, said. “We must continue to educate Canadians from a practical, real world, point of view. What is affecting the Canadian housing market right now? Low interest rates, economic stimulus, higher home-buying budgets, a higher savings rate, homeowners too scared to sell, and not enough new construction. These factors have created current market conditions.”