The real estate market will keep heating up this year, with the average price of a Canadian home expected to rise by more than 16%.
According to a new forecast report from the Canadian Real Estate Association (CREA), the national average home price is expected to rise by 16.5% to $665,329 in 2021. This is significantly higher than the 12.9% increase that was seen last year.
Not only will the prices rise, but the number of homes sold is expected to go up as well.
In February, the number of home sales in Canada grew by 6.6% month-over-month and 39.2% year-over-year, marking a record high for the eighth month in a row, according to CREA.
CREA is predicting that the amount will continue to grow and that a total of 701,000 residential properties will be sold in 2021.
The rise in prices expected this year is largely due to limited inventory on the market, as many homeowners are cautious of selling during uncertain times.
“The two big challenges that continue facing Canadian housing markets are the same ones we’ve been facing for months – COVID-19 and a lack of supply,” said CREA Chair Costa Poulopoulos. “With luck, potential sellers will feel more comfortable listing their homes in the short-term.”
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By 2022, the number of sales is expected to cool off, with only 614,000 homes projected to be sold that year — a 12.6% drop. According to the report, this drop is expected to affect all markets across the country as “previously pent-up demand is exhausted” and the “urgency to purchase a home base to ride out the pandemic fades.”
The rising national price in 2022 is also expected to see limited growth and is forecast to go up by just 2.1% to $679,000 as supply and demand become more balanced.
With that in mind, homebuyers worried about exorbitantly high prices that seem to be getting higher by the day can look forward to next year when they begin to plateau.