The Greater Toronto Area\u2019s chronic housing supply shortage will cause prices to grow 5.75% by the end of next year, according to a new report.<\/p>\n
Average home prices in the region are slated to hit $990,300, according to Royal LePage\u2019s 2021 forecast, while low-rise houses are anticipated to reach $1,185,800, a 7.5% year-over-year increase. The average price of condos in the region, however, will only rise by 0.5% to $600,800\u2014the result of a modest boost in the 905 area offsetting a slight decline in the City of Toronto.<\/p>\n
The GTA\u2019s condo market has been in the doldrums this year because, catalysed by the COVID-19 pandemic, supply has outstripped demand. But the report noted that, despite condo listings surging this year, prices will not be adversely affected thanks to the federal government\u2019s record immigration targets for each of the next three years, and university students returning to their classrooms by autumn, which should cause a spike in resale condo demand in H2-2020.<\/p>\n
\u201cMany young people returned home to save money during the pandemic and we expect them to want to get back into city life when the vaccine becomes available,\u201d Debra Harris, vice president of Royal LePage Real Estate Services Ltd., said in the report \u201cThe question is whether consumer confidence in the condo market will be healthy given the surge in listings. The reality is that current inventory is much healthier than where we were last year. For the many young professionals who were discouraged by strong competition in the condo market in previous years, this window may be their opportunity to find a home they can get excited about living in.\u201d<\/p>\n
Royal LePage expects the aggregate home price nationwide to increase by 5.5% year-over-year in 2021.<\/p>\n
The nation\u2019s capital will be red-hot<\/strong><\/p>\n Bolstered by torrid demand from Torontonians searching for less density and more outdoor space, no housing market will see more growth in 2021 than Ottawa, where Royal LePage expects the average price of a home to grow by 11.5% year-over-year to $624,000. The price of ground-related homes in the city is slated to spike by 12% to $656,300, while its condominium market should increase by 7.5% to $417,900.<\/p>\n \u201cLiving in Ottawa gives you access to great schools and healthcare, a good job market and you can maintain a city lifestyle while affording a much larger home than what is offered in the GTA,\u201d Jason Ralph, managing partner of Royal LePage TEAM Realty, is quoted in the report. \u201cMany local buyers struggled to find what they were looking for in 2020 due to low inventory. With their return to the market in the spring coupled with continued demand from the GTA, prices are forecast to rise significantly.\u201d<\/p>\n Ralph added that competition in Ottawa\u2019s single-family home market will be fierce and, with no supply relief on the horizon, that multiple offers will drive prices up next year.<\/p>\n \u201cOttawa has very low inventory across all housing types, and the single-family home market is especially competitive,\u201d said Ralph. \u201cWe do not see inventory relief coming in the spring, which is expected to result in multiple offers and further price increases. However, despite price gains, Ottawa remains very affordable compared to capital cities internationally, as well as large urban centres in Canada.\u201d<\/p>\n Potential rise in mortgage defaults won\u2019t cool Montreal market<\/strong><\/p>\n The average price of a home in Greater Montreal, the country\u2019s second-largest metropolitan area, is anticipated to increase by 6% year-over-year in 2021, with the real estate market picking up from where it left off in 2020\u2014despite strict lockdown measures, it hasn\u2019t been hampered.<\/p>\n Montreal\u2019s aggregate home price will increase to $514,900 in 2021, according to Royal LePage, with the average single-family home will rising 7% to $656,200, and the median price of a condo inching up 3.75% to $382,600.<\/p>\n \u201cGenerally speaking, the number of condos for sale should continue to increase, especially in the downtown core, where prices could stabilize or even dip slightly in some cases, attracting first-time homebuyers who can take advantage of record-low interest rates,\u201d Dominic St-Pierre, Royal LePage Quebec\u2019s vice-president and general manager, predicted in the report. \u201cElsewhere in the region, condo prices could increase. One of the driving factors in condo demand will be the return of foreign students to the city centre, providing improved revenue for landlords who have seen rental prices shrink.\u201d<\/p>\n Canada\u2019s most expensive city will become even pricier<\/strong><\/p>\n Royal LePage expects the aggregate price of a home in the Greater Vancouver Area, Canada\u2019s most expensive metropolitan region, to surge by 9% to $1,262,600 next year. The region\u2019s low-rise houses will average $1,671,700, increasing by 10% year-over-year, with the median condo price slated to rise by 3.5% to $684,300. Mirroring Canada\u2019s other major urban centres, price appreciation in Greater Vancouver will be driven by low inventory in 2021.<\/p>\n \u201cIn March, we couldn\u2019t have imagined this is where we\u2019d be today, but despite public health concerns, consumer confidence remains high. With very attractive mortgage rates and the promise of a vaccine on the horizon, demand is likely to remain strong,\u201d said Randy Ryalls, managing broker at Royal LePage Sterling Realty.<\/p>\n \u201cWe are seeing multiple offers on almost every reasonably-priced detached listing. There simply isn\u2019t enough inventory to meet the demand. A balanced Vancouver market has about 15,000 active listings available. Right now, we\u2019re sitting at roughly 10,000. If we reach the end of January without an injection of inventory, we will continue to see upward pressure on prices in the spring. I expect a strong seller\u2019s market in 2021.\u201d<\/p>\n