Royal LePage First Quarter 2021 House Price Survey
Canadian home prices forecast to end year 13.5% higher than 2020 as waning affordability and modestly improving supply begin to slow the pace of future increases.
First-quarter regional highlights:
- Addressing chronically low inventory critical in solving the nation’s housing affordability crisis
- The aggregate price of a home in Canada rose 14.1% year-over-year in the first quarter of the year
- 67% of the 64 markets surveyed posted double-digit year-over-year aggregate home price gains
- Montreal’s aggregate home price forecast to increase 16% year-over-year; the highest in Canada among forecasted regions
According to the Royal LePage House Price Survey released today, the aggregate price of a home in Canada increased 14.1 percent year-over-year to $749,165 in the first quarter of 2021, as strong demand continues to outpace supply in virtually every market across the country. More than two-thirds of the regions surveyed (67%) saw year-over-year double-digit aggregate price gains, driven largely by the single-family property segment. Seventy-seven percent of regions surveyed reported median price appreciation of standard two-storey homes of ten percent or more.
The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 64 of the nation’s largest real estate markets. When broken out by housing type, the median price of a standard two-storey home rose 15.9 percent year-over-year to $894,140, while the median price of a bungalow increased 14.1 percent to $628,341, and the median price of a condominium increased 2.0 percent year-over-year to $509,364. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.
“2020 was a year like no other in Canadian real estate, with its unprecedented demand for homes, and month after month of record-setting sales and price appreciation,” said Phil Soper, president, and CEO of Royal LePage. “The usual winter slowdown was non-existent, and that momentum was carried forward through the first quarter of 2021.”
Royal LePage is forecasting that the aggregate price of a home in Canada will increase 13.5 percent to $805,000 in the fourth quarter of 2021, compared to the same quarter last year. The previous forecast, released in December 2020, has been revised upward to reflect the current state of the market.
A return to pre-pandemic levels of immigration; the vaccine rollout’s impact on economic stability and confidence in the labour market; and, continued low-interest rates are supportive of home price growth through 2021. The Canadian government plans to welcome 401,000 new permanent residents in 2021. While home prices in Canada’s largest urban areas continue to appreciate, growth in secondary cities is outpacing that of major centers.
“The winter of ‘20/’21 was one of the most imbalanced real estate markets in our country’s history, with so many people wishing to improve their living conditions and a pandemic-driven shortage of homes for sale,” said Soper. “We expect this extreme seller’s market to moderate as the year progresses. Some buyers will step away from the market in the face of sharply higher prices, and the supply of new listings should improve as people feel more confident that the health crisis is under control.
“It is important to note that the surge in housing demand over the past year was organic – buyers looking for family homes to live in. With borders closed, foreign investment was near non-existent, and speculative investment was very low. Yet new Canadians are beginning to arrive once more, and investors are regaining confidence and returning to the market. This should sustain the current real estate boom well into 2022,” continued Soper. “This will be especially supportive of the condominium segment in our large urban centres.”
Read the full article – ROYAL LEPAGE FIRST QUARTER 2021 MARKET REPORT