After nearly 20 months, the country is slowly and safely starting to navigate its way back to a degree of normalcy. Businesses are reopening their doors, Canadians are returning to work, mass vaccination programs carry on and consumer confidence is on the rise. And although a full economic recovery isn’t exactly a foregone conclusion, the expectation of a strong housing market continuing into the fall will undoubtedly hold it in a good position.
The stability of Canada’s housing market for the remainder of 2021 will be supported by an expected increase of average sale prices by 5% for all types of homes. Although prices and sales volumes gradually declined over the summer and the pandemic-driven homebuying frenzy has subsided somewhat, ongoing supply shortage and strong homebuying demand will continue to sustain prices, and underpin the existing competitive market. In short, the days of selling over-asking and buying through bidding-war battles are not over yet.
Single-detached homes in high demand
According to the Canadian Real Estate Association, housing markets across the country are currently situated somewhere between pre- and peak pandemic levels. Statistics vary across the country but, as expected, Ontario lays claim to some of the highest average residential price increases for single-detached homes, with average prices increasing by 26% in a year. The majority of regions in the province experienced increases between 20% and 35.5% year over year while two of the most populated cities, Toronto and Mississauga, along with the smaller Thunder Bay, experienced price increases below 20%.
In terms of condominiums and townhomes, smaller suburban markets such as Kitchener, North Bay, London, Peterborough and Southern Georgian Bay are seeing a higher gain year over year. The estimated price outlook for the remainder of the year ranges from a 2% price decrease in North Bay to increases across the other regions ranging between 2% and 15%.
Also contributing to market strength is the reopening of borders, which has led to a resurgence of newcomers, many of whom will settle in the GTA. The Toronto Regional Real Estate Board (TRREB) expects market conditions to become tighter as this growth in population and rise in potential buyers starts to trend back to pre-COVID levels, and as we approach 2022. Modified housing needs and remote working will continue to drive sales in the suburbs and rural regions, while young families looking to make their homeownership dreams a reality will push demand and prices even as more homes go on the market. This is reinforced by TRREB Board President Kevin Crigger, who says that first-time homebuyers, many of whom were slower to benefit from the initial recovery phase, remain very active in the marketplace.
By all accounts, current trends and the outlook for housing market activity suggest a strong 2021 to the end. And while it remains to be seen whether that activity will return to more typical levels in 2022, for the next few months at least, buyers and sellers alike would be wise to buckle up and ride out the end of another incredible and unpredictable year.
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