Average Canadian home price expected to rise 16% this year
After many months of red hot real estate markets across the country, the average price of a Canadian home is expected to keep on rising this year.
A new report from Royal LePage is predicting that the average Canadian home price will hit a whopping $771,500 by the year’s end. This would mark a 16% increase from the end of 2020, and is an increase from the previously forecasted fourth-quarter home price.
“Over the past six months, soaring prices and intense competition for the limited supply of homes for sale have left many Canadians frustrated with their inability to improve their housing situation,” said Phil Soper, president and CEO of Royal LePage. “As home prices stabilize, many of these potential buyers, who will have had time to build up a larger down payment, should have an opportunity to transact.”
The largest growth is expected to happen in the Greater Montreal Area, where prices are predicted to increase 17.5%, closely followed by Ottawa with an expected 17% rise.
The market has already seen significant increases so far this year. The aggregate price of a Canadian home was up 25.3% year-over-year to $727,000 during the second quarter of 2021 — something the report says is due to a continuing shortage of inventory.
Single-family homes, in particular, have risen the most, going up by 27.1% year-over-year to $765,000. Condos, on the other hand, rose just 11.7% to $525,000.
“After a year of record growth in the Canadian housing market, we appear to have passed the peak of price appreciation,” Soper said. “While current home price gains are expected to be sustained due to chronically low inventory and new demand from growing household formation, investors and newcomers, the torrid pace of home price appreciation has begun to moderate.”
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Although the pandemic fuelled interest in suburban homes with more space, Karen Yolevski, chief operating officer, Royal LePage Real Estate Services Ltd, predicts Canadians will soon be drawn back to city centres.
“Young people will always be drawn to the downtown core,” Yolevski said. “The walkability, access to restaurants and entertainment, and the diversity of different neighbourhoods will once again become top priorities for potential buyers once the fear caused by the pandemic diminishes.”