There’s no other way to put it. 2020 was a banner year for real estate in Canada. The Canadian real estate market set several records in 2020, including record national home sales in the month of December 2020. Home prices continued their upward trend in 2020 as well in most segments, with the exception of downtown condos, weathering the storm of COVID-19.
Will we see a similar trend in 2021? Let’s take a look at regulator, industry association and real estate firms to see the year 2021 is expected to be.
The Canadian Real Estate Association (CREA)
2021 Forecast: +9.1%
Key Quote: “Current trends and the outlook for housing market fundamentals suggest activity will remain relatively healthy through 2021, with prices either continuing to climb or remaining steady in all regions.”
Commentary: The CREA is by far the most optimistic when it comes to the Canadian real estate market in 2021. It’s important to take it with a grain of salt. It’s in the CREA’s best interest to paint a rosy picture, as it’s the trade association that represents realtors in Canada. That doesn’t mean its prediction isn’t accurate. It’s just important to know the lens it’s looking at the Canadian real estate market from.
The Canada Mortgage and Housing Corporation (CMHC)
2021 Forecast: -9% to -18%
Key Quote: “As we continue to deal with the impacts of the COVID-19 pandemic, it’s important to monitor the evolving financial risks facing Canadian housing markets including an uneven economic recovery impacting most vulnerable populations.”
Commentary: The CMHC is by far the most pessimistic when it comes to the Canadian real estate market. This shouldn’t come as any surprise. It’s a regulator. It’s responsible for stress testing the Canadian real estate market. It would rather be cautious. Its 2021 prediction does seem to be overly pessimistic. It’s made similar “doom and gloom” predictions in the past and been wrong. Let’s hope for the Canadian real estate market’s sake that the CMHC is wrong again in 2021.
Royale LePage
2021 Forecast: +5.5%
Key Quote: “Across the country, a large number of hopeful buyers intent on improving their housing situation were not able to find the home they were looking for this year, as the inventory of properties for sale came nowhere near to meeting surging demand. With policy makers all but promising record low, industry supportive interest rates to continue, we do not see this imbalance improving in the new year. The upward pressure on home prices will continue.”
Commentary: Royale Lepage expects the trend of Canadians moving from the big city to the country for more space to continue. It predicts those that couldn’t buy in 2020 or weren’t ready to buy, to attempt to buy in 2021, pushing home prices up by a healthy five percent. Low interest rates will continue to attract interest from home buyers, as a balanced or seller’s market will prevail in most markets across Canada.
RE/MAX
2021 Forecast: +4% to +6%
Key Quote: “RE/MAX Canada is anticipating healthy housing price growth in 2021, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.”
Commentary: Similar to Royale Lepage, RE/MAX is optimistic about the Canadian real estate market. It notes that many including the CMHC thought that COVID-19 was going to be a big disruption to the real estate market. However, the real estate market managed to find a way to rise to the occasion and have a banner year in 2020. RE/MAX expects much of the same in 2021.
