Royal LePage: More than half of Canada’s largest real estate markets see double-digit price growth as national home values soar 9.7% in fourth quarter

  • Price of detached homes continue to outpace condominiums as Canadians trade location for square footage
  • Despite strong push toward the suburbs, Toronto and Montreal single-family homes see double-digit price gains in city centres
  • Median price of a two-storey home in Greater Vancouver rises 8.8% as buyers prioritize square footage
  • Out-of-region buyers spur Maritimes’ home prices, as option of remote work and demand for large, affordable properties grows
  • Aggregate price of a home in Canada rose $206,815 since Q4 2015

TORONTO, January 15, 2021 –According to the Royal LePage House Price Survey released today, the aggregate[1] price of a home in Canada increased 9.7 per cent year-over-year to $708,842 in the fourth quarter of 2020, as strong seller’s market conditions continued to shape Canada’s real estate market through the end of the year. The significant year-over-year increase in aggregate price was driven by price gains for larger properties. Sixty-four per cent of all regions surveyed showed year-over-year median price gains of more than 10 per cent for two-storey homes.

The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the median price of a standard two-storey home rose 11.2 per cent year-over-year to $840,628, while the median price of a bungalow increased 10.0 per cent to $592,899. The median price of a condominium increased 3.9 per cent year-over-year to $509,239. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.

“In April 2020, we issued our pandemic period forecast for Canadian real estate, the principle prediction being that unexpectedly soft spring home prices, historically low interest rates, and years of pent-up demand would trigger a sharp recovery of sales volumes and rising property prices in the second half of the year,” said Phil Soper, president and CEO of Royal LePage. “As we close the books on the strangest year in my long career, ‘recovery’ proved to be an understatement. Looking at fourth quarter results we can state without hyperbole that the health crisis triggered a real estate boom.

“High levels of unresolved housing demand and low inventory levels will likely characterize the 2021 spring market, putting further upward pressure on housing values, particularly in the detached and larger townhome segments, as families with access to extremely low borrowing costs trade traditionally desirable urban locations for more personal space,” he continued.

Nationally, Ontario posted the highest year-over-year aggregate home price gains in dollar value during the fourth quarter. During this period, the aggregate price of a home in Markham increased $133,932 to $1,100,436, the highest dollar value increase in aggregate home price. Markham was followed by Vaughan, which increased by $132,699 to $1,130,483; Burlington, which increased by $115,475 to $950,796; Pickering, which increased by $110,905 to $856,725; and, Oakville, which increased by $109,912 to $1,215,405.

“Confined to their homes, Canadians are struggling to adapt their properties to accommodate the need for an office, school classroom and gym, and find themselves longing for more living space,” said Soper. “Yet buying a house is not like buying a car; for most it is a long-term commitment. Post-crisis, some employers will be accommodating of work-from-home employee requests, and some businesses will require that their teams work together in offices again. Many will adopt a hybrid model. Home shoppers should look at prospective neighbourhoods through a post-pandemic eye, paying careful attention to the things that will matter when we drop our masks, including restaurants, access to entertainment and even walkability.”

Soper added that the surge in sales that characterized the second half of the year is a sign that Canadians feel confident buying and selling properties during the pandemic.

“The real estate industry has shown that buying and selling property can be done safely as much of the search and purchase process can now be done online,” he said. “Our real estate agents can help families looking for a home with efficient digital showings. Physical private viewings of a short-listed property should be done in compliance with best practice and public health guidelines. Clients can use their phone or computer to complete the transaction, leveraging today’s advanced technologies.”

While many Canadians have been seeking larger homes outside of urban centres, demand for properties in Canada’s largest urban centres have remained high. Ottawa’s aggregate price increased 14.9 per cent year-over-year to $568,608 during the fourth quarter, the greater regions of Montreal, Toronto and Vancouver increased 12.4 per cent, 10.4 per cent and 7.2 per cent to $487,380, $936,510 and $1,155,346, respectively.

Strong demand in the fourth quarter also resulted in price stability in Canada’s energy and agriculture regions. During the period, the aggregate home price in Saskatoon, Regina and St. John’s increased year-over-year by 6.3 per cent, 3.4 per cent and 0.8 per cent to $400,173, $327,517 and $325,833, respectively. Edmonton and Calgary’s aggregate home prices remained relatively stable, dipping 0.1 per cent and 0.5 per cent to $372,515 and $467,041, respectively.

Demand from local buyers and those relocating back to the Maritimes put significant upward pressure on prices. During the quarter, Halifax posted the highest increase in aggregate price, rising 17.1 per cent year-over-year to $377,469. Charlottetown posted the second highest increase in aggregate price rising 12.7 per cent year-over-year to $344,823, during the same period.

In December 2020, Royal LePage issued its 2021 forecast stating that the national aggregate price of a home is expected to increase 5.5 per cent year-over-year. To read more about Royal LePage’s national and major urban centre forecast, please go to rlp.ca/2021-forecast.

REGIONAL SUMMARIES 

Greater Toronto Area

The aggregate price of a home in the Greater Toronto Area (GTA) increased 10.4 per cent year-over-year to $936,510 in the fourth quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 11.9 per cent year-over-year to $1,102,155 in the fourth quarter, and the median price of a bungalow rose 12.8 per cent year-over-year to $923,047. During the same period, condominiums in the region continued to see healthy price appreciation, with the median price rising 3.6 per cent year-over-year to $593,811.

With the exception of condominiums, similar strong home price gains were seen in the City of Toronto where the aggregate price of a home rose 7.4 per cent year-over-year to $960,368 in the fourth quarter. Broken out by housing type, the median price of a standard two-storey home increased 10.6 per cent year-over-year to $1,446,184, and the median price of a bungalow rose 12.3 per cent year-over-year to $1,001,083. During the same period, the median price of a condominium grew 1.4 per cent year-over-year to $634,081.

“Throughout the second half of 2020, buyers were looking for as much space as they could afford. While many buyers shifted their target neighbourhood away from the city centre, so few properties for sale meant that most detached listings saw multiple-offer scenarios,” said Debra Harris, vice president, Royal LePage Real Estate Services Ltd. “2020 did bring some balance to the region’s condominium market but larger units, often in the greater region, are still in high competition.”

Harris added that pent-up demand in the GTA remains significant for detached homes and inventory levels will be a leading indicator of price appreciation in the spring market.

“The GTA real estate market could absorb a short-term influx of detached home listings and remain in a seller’s market. If inventory remains low, prices can only go up,” said Harris.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in the Greater Toronto Area will increase 5.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Greater Montreal Area 

In the Greater Montreal Area, the aggregate price of a home posted a 12.4 per cent increase year-over-year reaching $487,380 in the fourth quarter of 2020. When broken down by housing type, the median price of a standard two-storey home increased 13.6 per cent year-over-year to $619,099 in the fourth quarter, and the price of a bungalow rose 15.3 per cent year-over-year to $391,493. During the same period, condominiums in the region continued to see strong price appreciation, although at a slower pace than single-family homes, with the median price rising 8.1 per cent year-over-year to $367,113.

In the core of Montreal, the aggregate price of a home rose 10.8 per cent year-over-year to $613,268. Broken out by housing type, the median price of a standard two-storey home increased 13.3 per cent year-over-year to $836,790, and the price of a bungalow rose 12.1 per cent year-over-year to $582,225. During the same period, the median price of a condominium grew 7.1 per cent year-over-year to $442,317.

“Conditions were favourable to make 2020 a year of strong growth for Montreal’s real estate market,” said Dominic St-Pierre, vice-president and general manager of Royal LePage for the Quebec region. “During the first wave of the health crisis, it was difficult to predict how it would impact the economy and, more importantly, consumer behaviour. We could have seen a price correction if buyers had left the market. But low interest rates, combined with increased household savings from remote work and new buyer incentives, played a key role in a market that was already highly competitive before the pandemic. In the suburbs and on the Island of Montreal, activity in the single-family segment resulted in double-digit price increases in most neighbourhoods of the Greater Montreal Area.

“Historically, the Montreal core has always been the hottest spot for both sales activity and prices. No one could have predicted before COVID-19 that the pace of markets on the outskirts of Montreal would outpace the city,” said St-Pierre.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in the Greater Montreal Area will increase 6.0 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Greater Vancouver 

The aggregate price of a home in Greater Vancouver increased 7.2 per cent year-over-year to $1,155,346 in the fourth quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 8.8 per cent year-over-year to $1,507,279 in the fourth quarter, and the median price of a bungalow increased 6.8 per cent to $1,265,285. During the same period, the median price of a condominium increased 3.3 per cent year-over-year to $662,120.

In the city’s centre, the aggregate price of a home rose 5.7 per cent year-over-year to $1,306,820 in the fourth quarter. Broken out by housing type, the median price of a standard two-storey home increased 7.3 per cent year-over-year to $2,113,504, and the price of a bungalow rose 4.1 per cent year-over-year to $1,424,474. During the same period, the median price of a condominium grew 3.9 per cent year-over-year to $784,351.

“Multiple offers were common throughout the fourth quarter and almost every detached home was attracting competitive bids. Buyer confidence is strong and current low interest rates make purchasing even more attractive,” said Randy Ryalls, general manager, Royal LePage Sterling Realty. “Buyers are worried they will be priced out of the market and with our low inventory of homes for sale in the region, prices are expected to go up in the spring.”

Ryalls added that while new listings slowed in the fourth quarter, which is consistent with seasonal trends, the pipeline of buyers continues to grow.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Greater Vancouver will increase 9.0 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Ottawa 

The aggregate price of a home in Ottawa increased 14.9 per cent year-over-year to $568,608 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 14.8 per cent to $595,991, while the median price of a bungalow increased 15.9 per cent to $588,320, and the median price of a condominium increased 13.8 per cent to $385,525.

“The strong seller’s market is expected to persist through 2021, as demand continues to outpace supply in Ottawa,” said Jason Ralph, managing partner, Royal LePage TEAM Realty. “The city is more affordable than Vancouver or Toronto and that’s attractive to both first-time buyers and young professionals from across the country, especially those with families.”

Ralph noted that prices are set to continue a steady upward climb as potential buyers who were unsuccessful purchasing in 2020 re-enter the upcoming spring market.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Ottawa will increase 11.5 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Calgary 

The aggregate price of a home in Calgary dipped slightly by 0.5 per cent year-over-year to $467,041 in the fourth quarter of 2020. During the same period, the median price of a two-storey home decreased 0.5 per cent to $512,107, while the median price of a bungalow increased 0.5 per cent to $493,164, and the median price of a condominium decreased 3.7 per cent to $248,840.

“Calgary remains an attractive place to purchase a home, partly due to its affordability relative to other major cities in Western Canada,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “With inventory levels the lowest we’ve seen in nearly two decades, specifically in the single-family detached market, I expect a brisk spring market in 2021.”

Lyall added that all signs point to continued stability in the region as an increase in immigration next year will likely create new opportunities for investors, and those looking to relocate to the region as remote work remains a viable option for many.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Calgary will increase 0.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Edmonton 

The aggregate price of a home in Edmonton dipped slightly by 0.1 per cent year-over-year to $372,515 in the fourth quarter of 2020. During the same period, the median price of a two-storey home remained flat at $427,530, while the median price of a bungalow increased 0.4 per cent to $360,996, and the median price of a condominium decreased 1.3 per cent to $217,141.

“Edmonton’s housing market has been relatively flat throughout the pandemic, with sellers hesitant to list their homes due to safety concerns. However, the resilience of Edmonton’s home prices during the pandemic is reassuring to both buyers and sellers,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. “I anticipate a brisk spring market, as consumer confidence rises once a vaccination plan is well underway.”

Shearer added that demand for detached homes, driven by young families, remains strong and low inventory in this segment of the market is expected to put upward pressure on prices in the new year.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Edmonton will increase 1.5 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Halifax 

The aggregate price of a home in Halifax increased 17.1 per cent year-over-year to $377,469 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 17.5 per cent to $399,282, while the median price of a bungalow increased 19.4 per cent to $335,744, and the median price of a condominium increased 4.0 per cent to $301,615.

“Inventory levels have hit historic lows in recent months, putting continued upward pressure on prices,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “Local buyers are looking for more space, and now, more than usual, they are competing with out-of-province buyers, many of whom are returning to the Maritimes. The option of remote work has altered the landscape of the real estate market.”

Honsberger added that many new construction projects are experiencing delays due to uncertainty surrounding the pandemic, further contributing to the supply shortage.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Halifax will increase 7.5 per cent in the fourth quarter of 2021, compared to the same quarter in 2020. 

Winnipeg

The aggregate price of a home in Winnipeg increased 7.1 per cent year-over-year to $330,273 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 11.4 per cent to $372,915, while the median price of a bungalow increased 3.7 per cent to $307,841, and the median price of a condominium increased 0.2 per cent to $231,500.

“That remote work will remain an option indefinitely is a reality for many Canadians, resulting in continued high demand for homes with more space,” said Michael Froese, broker and manager, Royal LePage Prime Real Estate. “As long as the supply shortage continues in Winnipeg and the surrounding communities, prices will remain buoyant.”

Froese added that the pace of sales has been exceptionally brisk. In the fourth quarter of 2020, the median number of days a detached home spent on the market was ten, compared to 27 during the same time period in 2019.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Winnipeg will increase 4.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Regina

The aggregate price of a home in Regina increased 3.4 per cent year-over-year to $327,517 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 4.2 per cent to $402,903, while the median price of a bungalow increased 2.1 per cent to $295,421, and the median price of a condominium rose 8.2 per cent to $222,210.

“The trend of steadily increasing prices that we’ve seen over the last year in Regina will likely extend into the spring, as the need for more space continues to drive demand,” said Mike Duggleby, broker and owner, Royal LePage Regina Realty. “We are experiencing an inventory shortage, like many cities in Canada. Until supply can keep up with growing demand, prices will keep climbing.”

Duggleby added that the return of international students to the region will put further upward pressure on prices, specifically in the condominium segment.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Regina will increase 2.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Royal LePage Home Price Data:

Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2020 

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Royal LePage’s media room contains royalty-free assets, such as images and b-roll, that are free for media use.

 

About the Royal LePage House Price Survey

The Royal LePage House Price Survey provides information on the three most common types of housing, nationally and in 62 of the nation’s largest real estate markets. Housing values in the Royal LePage House Price Survey are based on the Royal LePage Canadian Real Estate Market Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 18,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.

HousingMarket

Royal LePage: Canadian home prices forecast to rise 5.5% by the end of 2021 as low inventory and unmet demand set to fuel price increases

  • Aggregate price of a home in the Greater Toronto Area forecast to rise 5.75%
  • Tech and government sector expansion to drive Ottawa prices up 11.5%
  • Canada’s priciest city to experience 9.0% rise as housing demand in Vancouver surges
  • Halifax and Greater Montreal prices forecast to rise 7.5% and 6.0%, respectively
  • Calgary, Edmonton prices buck regional economic drag, to show modest price growth

TORONTO, ON, December 14, 2020 – Housing demand exceeded expectations in the second half of 2020. The supply of homes available for sale failed to keep pace, driving home prices higher and pushing unmet buyer demand into the new year. According to the Royal LePage Market Survey Forecast, the aggregate[1] price of a home in Canada is set to rise 5.5 per cent year-over-year to $746,100 in 2021, with the median price of a two-storey detached house and condominium projected to increase 6.0 per cent and 2.25 per cent to $890,100 and $522,700, respectively.[2]

“The leading indicators we analyze are pointing to a market that favours property sellers in the all-important spring of 2021,” said Phil Soper, president and CEO, Royal LePage. “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.

“There was a clear shift towards larger properties and single-family dwellings in 2020, as families repurposed homes to become their office, school classroom, gymnasium and restaurant during the pandemic,” Soper continued. “We expect this trend to moderate as life returns to normal in the months ahead. It is also worth noting, that Canada welcomed a new generation of first-time homeowners this year, encouraged by lower financing costs and softer demand for city centre condominiums. Urban living remains attractive for many.”

The value of single-family houses and homes outside of major urban markets are forecast to continue to outpace city core condominiums in the year ahead, driven both by Canadians seeking larger homes in a time where remote work has become more commonplace, and broad-based demographic trends, including baby-boomer retirement.

“Mega-trends that predate the pandemic are pushing home prices higher in secondary markets outside of our largest cities. Corporate Canada’s pandemic-driven move to work-from-home operations has simply accelerated relocation patterns already underway,” said Soper. “The huge baby-boomer demographic began post-children migration to suburban and recreational-style communities in the middle of the last decade, and material numbers of the equally populous millennial generation have been exiting city centre condos in search of space as they began families.”

Soper added that the trend of high demand outside of urban centres will slowly ease as listings in city centres become more competitive against growing prices in suburban and exurban markets.

Immigration is critical to the housing market both indirectly, as it is supportive of economic growth, as well as directly through housing demand. In October, the federal government announced its plan to add more than 1.2 million immigrants over three years, a significant jump from previous years. Previously published Royal LePage research[3] into this demographic shows that newcomers to Canada typically rent for three years before purchasing, after which they have a material impact on new household formation and overall housing demand. An increase in immigration is supportive of both the resale market and investment demand for rental condominiums.

Nationally, the condominium segment is expected to see healthy demand in most of Canada’s largest cities. A notable exception is the Greater Toronto Area where a softer condominium market began emerging in the second half of 2020. Within the region, modest price gains for larger units outside of the city centre is expected to continue to offset softer demand in the downtown core. With the return of international university student rental demand and newly arrived immigrants in the second half of 2021, demand for centrally located units should increase.

The concern regarding the impact of potential mortgage defaults related to mortgage deferrals during the summer has eased significantly, as many Canadians who deferred payments have begun repayment. According to CMHC, as of September 30, 2020, the organization’s entire insured book of business has 5 per cent of loans with a payment deferral in place; a decline from approximately 8 per cent in August.[4]

“The first half of 2021 will be something of an economic and social tug-o-war between advancing medical science and surging housing demand,” concluded Soper. “The real estate brokerage industry has developed protocols that allow us to safely sell property during the pandemic, yet some would-be sellers will remain cautious and not list their properties while high levels of COVID-19 transmission remain the norm, restricting available housing supply.”

Royal LePage 2021 Market Survey Forecast Price Table:

rlp.ca/rlp2021_forecast_table

MARKET SUMMARIES

Greater Toronto Area

In the Greater Toronto Area, the aggregate price of a home in 2021 is forecast to increase 5.75 per cent year-over-year to $990,300. During the same period, the median price of a standard two-storey home is expected to rise 7.5 per cent to $1,185,800, while the median price of a condominium is forecast to increase 0.5 per cent to $600,800. The relatively flat median price projection for the condominium segment reflects a modest increase in median price for condominiums in the 905 area, offsetting a slight dip in median price for the City of Toronto.

“Single family homes remain in high demand. We expect lighter activity as we near the winter holidays but if inventory does not improve in early 2021, we could have another year of strong price appreciation,” said Debra Harris, vice president, Royal LePage Real Estate Services Ltd. “Low inventory is expected to put upward pressure on prices but we could see low unit sales if there isn’t product to sell.”

Performance within the condominium segment is expected to remain varied with higher demand for larger units in the 905 area. Harris added that while there has been a recent surge in condominium listings, the historically starved Toronto condo market can withstand an increase in condo supply without significantly impacting price in the short term. With the federal government’s new and aggressive immigration targets as well as the expected return of rental demand from university students in the fall, resale demand for condominiums should be significantly higher in the second half of the year.

“Many 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. The 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,” said Harris. “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.”

Greater Montreal Area

In the Greater Montreal Area, the aggregate price of a home in 2021 is forecast to increase 6.0 per cent year-over-year to $514,900. During the same period, the median price of a standard two-storey home is expected to rise 7.0 per cent to $656,200, while the median price of a condominium is forecast to increase 3.75 per cent to $382,600.

“The pandemic has sparked our imagination in the sense that it’s given people the opportunity to take on real estate projects that would have been impossible without the option of remote work,” said Dominic St-Pierre, vice-president and general manager, Royal LePage Quebec. “Buying a property became the main objective of many households, and for some, the only way to get some fresh air during the pandemic. We expect demand will only ease when Canadians truly come out of lockdown, that is to say when travel and regular activities can resume.”

St-Pierre added that Montreal’s real estate market has proven to be surprisingly resilient in the face of 2020’s economic uncertainty and the effects of the global pandemic on urban lifestyle.

Despite the exodus of Montrealers to the suburbs over the course of the last several months, demand on the island for single-family homes, and some condominiums, has reached new heights. Well-priced properties are selling quickly, due to a lack of inventory and accumulated demand prompted by health and safety restrictions.

“In advance of upcoming mass distribution of the vaccine and a return to normal business activity, it is possible that prolonged safety restrictions and their impact on the precarious job market, could lead to an increase in mortgage defaults, which would inject inventory into the real estate market,” suggested St-Pierre. “However, pent-up demand has been so high in the Greater Montreal Area that such a boost in inventory would be insufficient to cool the market, as properties would be absorbed immediately.”

In 2021, Greater Montreal’s condominium market will vary from one neighbourhood to the next.

“Generally 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,” predicts St-Pierre. “Elsewhere 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.”

Greater Vancouver

In Greater Vancouver, the aggregate price of a home in 2021 is forecast to increase 9.0 per cent year-over-year to $1,262,600. During the same period, the median price of a standard two-storey home is expected to rise 10.0 per cent to $1,671,700, while the median price of a condominium is forecast to increase 3.5 per cent to $684,300.

“I am confident we will continue to see prices rise next year. Vancouver has proven to be a rather resilient market, with high demand and quite low inventory,” said Randy Ryalls, managing broker, Royal LePage Sterling Realty. “In March, we couldn’t have imagined this is where we’d 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.”

Ryalls noted that the current market conditions create a tough situation for buyers, who are oftentimes competing for properties; something he expects is likely to continue through 2021.

“We are seeing multiple offers on almost every reasonably-priced detached listing. There simply isn’t enough inventory to meet the demand,” said Ryalls. “A balanced Vancouver market has about 15,000 active listings available. Right now, we’re 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’s market in 2021.”

Ryalls added that while the condominium market is not as strained as the single-family detached sector, demand remains strong.

Ottawa

In Ottawa, the aggregate price of a home in 2021 is forecast to increase 11.5 per cent year-over-year to $624,000. During the same period, the median price of a condominium is expected to increase 7.5 per cent to $417,900, while the median price for a two-storey detached home is forecast to rise 12.0 per cent to $656,300.

“Ottawa real estate continues to see high demand from Toronto buyers who are looking for less density and more outdoor spaces. Living 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,” said Jason Ralph, managing partner, Royal LePage TEAM Realty. “Many 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.”

Ralph added that while inventory is critical to a healthy spring market, demand is expected to continue to outpace supply.

“Ottawa has very low inventory across all housing types, and the single-family home market is especially competitive,” said Ralph. “We 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.”

Calgary

In Calgary, the aggregate price of a home in 2021 is forecast to increase 0.75 per cent to $469,600 year-over-year. During the same period, the median price of a condominium is forecast to decrease 1.0 per cent to $258,000, while the median price of a two-storey detached home is forecast to rise 1.5 per cent to $514,800.

“Inventory for detached homes has not seen similar lows since 2001. Buyers are eager to get into the market, but they may have to broaden their search to find a good selection to choose from if they are looking for detached homes in popular neighbourhoods,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “While spring is expected to bring new inventory to the market, we are also anticipating a healthy level of demand from buyers, resulting in a balanced market.”

As a result of low interest rates, Lyall added that buyer demand has stabilized and the downturn in the oil market is promoting a more diversified economy. The federal government’s recent increase in immigration targets may spur the condo market, providing more price stability and a potential opportunity for price gains. The condominium market is expected to dip modestly in median price, however, high demand from entry-level buyers and single professionals will continue to absorb some oversupply.

Edmonton

In Edmonton, the aggregate price of a home in 2021 is forecast to increase 1.5 per cent year-over-year to $375,600. During the same period, the median price of a two-storey detached home is forecast to increase 1.5 per cent to $430,700, while the median price of a condominium is expected to rise 1.0 per cent to $215,100.

“In the second half of 2020, demand has outpaced supply and inventory is currently the lowest it’s been in five years. Some single-family homes are even attracting multiple offers and I expect to see the buyers who didn’t transact this fall, return in the spring. The question is whether the inventory will be there,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. “In 2020, many sellers took their homes off the market due to their concerns regarding COVID-19. If we find ourselves again with a limited supply of houses on the market, prices will move upward.”

Shearer added the challenges that the Edmonton real estate market has faced in recent years have been absorbed into current pricing as sellers have now made their listings more competitive.

“There is excellent value in Edmonton,” added Shearer. “Homeownership is possible for most professionals, and young families can find detached properties in desirable neighbourhoods.”

Halifax

In Halifax, the aggregate price of a home in 2021 is forecast to increase 7.5 per cent year-over-year to $400,700. During the same period, the median price of a two-storey detached home is forecast to rise 9.0 per cent to $435,300, while the median price of a condominium is forecast to increase 7.0 per cent to $322,300.

“The number of listings in Halifax is the lowest it has been in 16 years and demand is still strong. As remote work becomes more permanent, buyers are moving back to the Maritimes,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “Halifax will continue to be in high demand as buyers from outside of Atlantic Canada seek affordability and the Maritime lifestyle while easily accessing the best of the city. You can live on the outskirts of Halifax and be downtown in 15 minutes. It’s the best of both worlds.”

Honsberger says while current demand for condominiums is lower than detached homes, there are signals that demand for condos may increase in 2021.

“While international students make up a smaller percentage of condo renters and buyers than other Maritime cities, a return to pre-COVID demand will stimulate the condominium market as students are expected to return in autumn 2021,” said Honsberger. “The timing of new build projects has also been pushed out, which could dampen supply in the new year.”

Winnipeg

In Winnipeg, the aggregate price of a home in 2021 is forecast to increase 4.75 per cent year-over-year to $348,700. During the same period, the median price of a two-storey detached home is expected to rise 5.0 per cent to $401,600, while the median price of a condominium is forecast to increase 1.25 per cent to $230,100.

“Approximately 95% of listings that were added to the market in November, sold. That’s unheard of in Winnipeg,” said Michael Froese, broker and manager, Royal LePage Prime Real Estate. “Even with the increased COVID-19 restrictions, demand remains strong. Heading into the new year, there would have to be a significant rise in our seasonal supply of listings to meet it.”

Froese added that strong demand for homes in the outlying communities is expected to remain a trend in 2021, as companies and individuals continue to normalize remote work and buyers look for homes that fit their new needs. Homes and communities that offer these types of amenities are thriving as much space as possible for their dollar.

Regina

In Regina, the aggregate price of a home in 2021 is forecast to increase 2.75 per cent year-over-year to $335,600. During the same period, the median price of a two-storey detached home is forecast to increase 3.0 per cent to $417,400, while the median price of a condominium is forecast to increase 1.5 per cent to $226,000.

“Low inventory continues to result in multiple offer scenarios as buyers seek larger homes. Consumer confidence is healthy and if we see a significant lift in inventory in the new year, we should have a brisk spring market” said Mike Duggleby, broker and owner, Royal LePage Regina Realty. “There is a high degree of uncertainty, but if current trends continue into 2021, there will be upward pressure on prices.”

Duggleby added that condominiums, after years of oversupply, are proving to be popular with investors who see current prices as below their value.

“Condominium investors have two streams of demand – university students and young immigrant families. If the Canadian government hits its newly revised immigration target and university students return in the fall, demand for condominiums will increase.”

CoTTAGE

Canadian recreational house prices soar 11.5% as remote work drives demand in cottage country

  • Canada’s recreational property market forecast to increase 8% in 2021
  • 86% of recreational property regions are reporting lower inventory as demand outpaces supply
  • 54% of recreational property regions are reporting a significant increase in buyers who are purchasing a new primary residence where they will work remotely

TORONTO, ON, November 30, 2020 – According to Royal LePage, year-over-year price appreciation in Canada’s recreational property markets soared during the first nine months of 2020, driven by Canadians’ ability to work remotely. The aggregate price of a single-family home in Canada’s recreational market rose 11.5 per cent to $453,046 and the aggregate price of a condominium rose 9.7 per cent to $280,830. The aggregate price of a waterfront property increased 13.5 per cent to $498,111.

“The pandemic has effected enormous economic and health challenges upon the nation; it has also opened a world of possibility for thousands of Canadians,” said Phil Soper, president and CEO, Royal LePage. “On lake and on sea, upon soaring mountain tops and on expansive farmlands, many Canadians are embracing a bold, new work-from-home doctrine: ‘I can live anywhere in this huge land.’

“In addition to the new wave of pandemic-era buyers, simple demographics have been buoying the exurban market as more and more of the giant Baby Boom generation retire,” Soper continued. “Interest in all types of recreational property is soaring, and I have never seen the number of cottages, cabins, chalets and farmhouses for sale at such a low level relative to demand.”

Eighty-four per cent of Royal LePage recreational property experts, representing 45 of Canada’s most popular recreational markets, reported an increase in buyers who were interested in working remotely from the property. Fifty-four per cent of regions surveyed reported a significant increase in buyers who sought to purchase a primary residence in a recreational market, enabled by their ability to work remotely.

Recreational property markets also saw an uptick in retiree buyers. While retirees are historically a significant buyer demographic for the recreational property market, the pandemic has spurred demand as retirees advance their plans to improve their quality of life by moving to cottage country. Sixty-eight per cent of regions reported an increase in retiree buyers compared to last year.

As a result of the COVID-19 pandemic, the typically brisk spring market was pushed to late summer and early fall with many regions seeing record-breaking autumn sales. As demand outpaced supply, 86 per cent of the regions surveyed reported less inventory than the previous year.

Nationally, Royal LePage is forecasting that the price of a recreational property in 2021 will increase 8 per cent year-over-year.

Atlantic Canada

During the first nine months of the year, the aggregate price of a single-family home in Atlantic Canada’s recreational property market increased 8.6 per cent year-over-year to $187,564, although those searching for waterfront can expect to pay more.

“Inventory levels are the lowest I’ve seen in 15 years,” says Heather FitzGerald, real estate professional, Royal LePage Atlantic in Moncton, New Brunswick. “The price of a recreational property is rising due to increased demand from local buyers looking to move away from the city and closer to nature and the water. There has also been an increase in buyers from Ontario and Quebec who are choosing the Maritimes as a great place to live and work remotely.”

All regions surveyed in Atlantic Canada reported an increase in buyers seeking a property where they could work remotely and most surveyed regions saw a significant increase in buyers seeking to purchase a recreational property in the region as a primary residence.

“Buyers from outside of the Maritimes, who expect to be working remotely for the foreseeable future, are flocking to the area,” said Corey Huskilson, real estate professional, Royal LePage Atlantic in Halifax, Nova Scotia. “Properties are attracting not only retirees, but working-aged Canadians who realize they don’t have to sacrifice space to be close to the office. They are taking advantage of the fact that they can now work from cottage country.”

Royal LePage is forecasting that the price of a recreational home in Atlantic Canada will increase 7 per cent in 2021.

Quebec

During the first nine months of the year, the aggregate price of a single-family home in Quebec’s recreational property market increased 14.7 per cent year-over-year to $236,628, while the aggregate price of a waterfront property increased 15.1 per cent to $255,502. The aggregate price of a condominium increased 13.1 per cent to $236,187.

“During the first wave of COVID-19, Quebec was subject to the longest lockdown period in the entire country. This sparked an urgent desire for many city dwellers, in need of more living space, to relocate to the suburbs and cottage country,” said Éric Léger, sales representative, Royal LePage Humania, in the Laurentians. “The Laurentians and Pays d’en-haut regions were among the areas to see the most interest throughout this period, on account of their vast landscape, available pre-pandemic inventory, and excellent market conditions.”

Léger says the vast majority of recreational property markets in the province of Quebec have also seen a significant increase in sales since the start of the year.

“Additional demand for cottage country properties, generated by increased safety restrictions in an already strong sellers’ market, has created even more aggressive activity in regions across the province,” confirms Léger.

All regions surveyed in Quebec reported an increase in buyers seeking a property where they could work remotely. Seventy-five per cent of the surveyed Quebec regions saw a significant increase in buyers seeking to purchase a recreational property as a primary residence and most regions saw an increase in retirees purchasing in the area.

As this unprecedented year comes to a close, Léger predicts that prices and demand in Quebec will continue to increase in 2021, but likely at a slower pace than what we’ve seen in 2020.

“Remote work, which is here to stay for the most part, will continue to attract buyers toward the countryside, and continued low interest rates will once again be a driving factor in the demand for real estate this year,” concludes Léger, suggesting the only thing that could cool this market is an injection of inventory; a solution that cannot be produced overnight.

Royal LePage is forecasting that the price of a recreational home in Quebec will increase 5.5 per cent in 2021.

Ontario

During the first nine months of the year, the aggregate price of a single-family home in Ontario’s recreational property market increased twenty per cent year-over-year to $450,127, while the aggregate price of a waterfront property increased 16.7 per cent to $571,266. The aggregate price of a condominium increased 17.6 per cent to $253,055.

One of Ontario’s most sought-after destinations for recreational properties is Muskoka. Bob Clarke, real estate professional, Royal LePage Lakes of Muskoka says the region has been booming for the last several years, and COVID-19 has only amplified that demand.

“Retiring baby boomers have been putting upward pressure on prices and reducing inventory for the last few years. Retirees are now finding themselves competing against remote workers. Both demographics have seen their savings grow through less travel and entertainment during the pandemic,” said Clarke. “We are also seeing an increase in current Muskoka owners who are looking to purchase larger properties, as their children have returned after job loss or the ability to work remotely. The most common question used to be ‘is the property West-facing?’ Now my clients’ biggest concern is internet quality.”

Most regions surveyed in Ontario reported an increase in buyers seeking a property where they could work remotely. Seventy-three per cent of the surveyed regions saw a significant increase in buyers seeking to purchase a recreational property as a primary residence. While retirees are historically a sizable demographic of recreational property buyers, 83 per cent of the surveyed regions reported an increase in retirees looking to purchase during the first nine months of 2020 compared to the previous year.

Royal LePage is forecasting that the price of a recreational home in Ontario will increase 10 per cent in 2021.

Prairies

During the first nine months of the year, the aggregate price of a single-family home in the Prairies’ recreational property market increased 27.6 per cent year-over-year to $338,170. The aggregate price of a waterfront property increased 10.8 per cent to $322,292.

“Price and proximity to Winnipeg are top of mind for buyers looking to get away from the city and work remotely in cottage country. The region has a lot to offer buyers, many of whom can now work by the lake,” said Tyler Bucklaschuk, broker, Royal LePage JMB & Associates. “The recreational real estate market has been strong for a number of years. Brisk sales and declining inventory is putting upward pressure on prices.”

Of the reporting regions, half saw an increase in remote workers. Demand in the Prairies has been largely driven by locals choosing cottage life over travel as vacationing abroad has become difficult due to COVID-19 travel restrictions.

“Saskatchewan’s recreational market is driven by its affordability and its pristine lakes. Highway developments have reduced the drive from Saskatoon to 1.5 hours, which makes working remotely more possible for those who still have to go into the office a few days a week,” said Lou Doderai, broker, Royal LePage Icon Realty. “With the increasing ability to work remotely, Saskatchewan’s lakeside communities are becoming more popular with Albertans who don’t mind the drive to access our sandy beaches and affordable property. You can purchase a beautiful lakefront home in Saskatchewan for $500,000.”

Royal LePage is forecasting that the price of a recreational home in the Prairies will increase 4 per cent in 2021.

Alberta

During the first nine months of the year, the aggregate price of a single-family home in Alberta’s recreational property market decreased 7.6 per cent year-over-year to $724,921. The decline in aggregate price reflects a shift in Canmore’s buyer and construction activity, where a surge of smaller affordable homes were built and sold while demand for luxury properties softened until the beginning of the fourth quarter. The aggregate price of a waterfront property in Alberta increased by seven per cent year-over-year to $506,607. The increase was driven by popular lake regions within commuting distance to Edmonton.

“Demand for recreational real estate in Alberta has never been this strong. Since the end of June, we have been seeing record high sales volume as remote work reshapes the market. In Canmore, Alberta-based buyers are increasingly competing against buyers from across Canada since the onset of the pandemic,” said Brad Hawker, managing broker, Royal LePage Rocky Mountain Realty. “Canmore is well-known for its charm, outdoor pursuits and access to Banff National Park. It’s the perfect place to reimagine your life when you can work from where you want to play.”

Compared to 2019, both Canmore and Pigeon Lake reported significantly more buyers seeking recreational property as primary residences where they can work remotely.

“People are looking for a change of scenery and some relief from the busyness of the city. That’s what is fueling sales right now,” said Tom Shearer, broker, Royal LePage Noralta Real Estate, in Edmonton. “Lake Wabamum is a perfect choice for buyers who want a safe environment where they can relax. And, it’s less than an hour away from Edmonton.”

Royal LePage is forecasting that the price of a recreational home in Alberta will increase 3 per cent in 2021.

British Columbia

During the first nine months of the year, the aggregate price of a single-family home in British Columbia’s recreational property market increased 12.9 per cent year-over-year to $788,478. The aggregate price of a condominium increased 3.8 per cent to $339,189.

“2020 has forced us all to shift our perspective, especially when it comes to quality of life,” said Francis Braam, broker, Royal LePage Kelowna. “With travel and vacation rental options limited – if not completely eliminated – West Coast buyers have been snapping up recreational properties in the Okanagan.”

Most regions surveyed in British Columbia reported an increase in buyers seeking a property where they could work remotely. Thirty per cent of the surveyed regions saw a significant increase in buyers seeking to purchase a recreational property in the region as a primary residence. Sixty per cent of the surveyed regions reported an increase in retiree buyers compared to the same period in 2019.

“Demand far outpaced supply in Whistler and Pemberton. New developments are coming online but the inventory relief can’t get here fast enough for buyers,” said Frank Ingham, associate broker, Royal LePage Sussex. “For the first nine months of 2020, sales have been up 40% compared to the same period in 2019. Demand has been mostly driven by remote workers who want to move to the mountains but remain close to Vancouver.”

Royal LePage is forecasting that the price of a recreational home in British Columbia will increase 8 per cent in 2021. 

For Recreational Property Price Data (43 regions), click here: rlp.ca/Recreational_Property_Prices2020

The Royal LePage Recreational Property Report compiles insights, data and forecasts from 53 markets. Median price data was compiled and analyzed by Royal LePage for the period between January 1, 2020 and September 30, 2020 and January 1, 2019 and September 30, 2019. Data was sourced through local brokerages and boards in each of the surveyed regions. Royal LePage’s aggregate home price is based on a weighted model using median prices.

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Royal LePage: National home prices rise sharply in second quarter as housing supply struggles to keep up with surge in demand

Balance expected to return to market in second half of the year

Two-storey house prices outpace condos as home-bound Canadians place premium on space
Ontario posts Canada’s highest home price increases, with Mississauga in top spot at 13.5% year-over-year
Royal LePage revises Canadian home price forecast upwards to 2.3% by year end 2020, as low rates and pent-up demand face limited housing supply

TORONTO, July 9, 2020 –According to the Royal LePage House Price Survey and Market Survey Forecast released today, the aggregate[1] price of a home in Canada increased 6.8 per cent year-over-year to $673,072, in the second quarter. Once provinces allowed regular real estate activity to resume, demand surged in many markets. Inventory levels, already constrained pre-pandemic, have failed to keep pace.

“Home prices shot up in the second quarter as a crush of buyers entered the market, attracted by extremely low interest rates and the perception of bargains to-be-had,” said Phil Soper, president and CEO of Royal LePage. “Across Ontario and Quebec in particular, the demand for housing outpaced the growth in supply, especially in the early weeks post-lockdown. The surge in the number of first-time buyers was felt acutely, as these housing consumers soaked up supply without contributing to it.”

Soper continued, “We are now seeing sellers return to the market in key supply-constrained regions in numbers sufficient to meet demand. Home buyers should enjoy more reasonable conditions with stable prices and improved selection in the second half of the year.”

The Royal LePage National House Price Composite is compiled from proprietary property data in 64 of the nation’s largest real estate markets. When broken out by housing type, the median price of a standard two-storey home rose 8.0 per cent year-over-year to $794,392, while the median price of a bungalow increased 3.9 per cent to $550,289. The median price of a condominium increased 5.3 per cent year-over-year to $503,983.

“COVID-19 shaped the real estate market during the second quarter in every possible way,” said Soper. “As consumers and Realtors®[2] complied with April’s shelter-at-home directives and only urgent housing needs were serviced, sales volumes plummeted to one-third of normal in our largest cities. As the reality of extended and potentially permanent work-from-home employment sunk in, people pondered both the location and size of their homes. Simply put, larger homes in smaller communities have become more fashionable. As competition for these properties heats up, bidding wars are more common in what were our quieter cities and towns.”

Across Canada, the 11 regions to post the highest year-over-year gains in median home price were in Ontario. In order, Mississauga (13.5%), Windsor (12.2%), Markham (11.9%), Ottawa (11.7%), Niagara/St.Catharines (11.3%), London (10.5%), Brampton (10.4%), Toronto (10.2%)/Greater Toronto Area (10.0%), Guelph (9.9%), Kitchener/Waterloo/Cambridge (9.8%), and Milton (9.7%).

Immigration

Immigration has been disrupted by pandemic travel restrictions, with the impact to real estate markets varying across regions and housing segments. Royal LePage’s 2019 Newcomer study showed that upon arriving in Canada, only 15 per cent of newcomers purchase their first home. The average time period after which newcomers will purchase a property is three years after arriving in Canada.[3]

“Our research shows that many of the newcomers to our nation who intended to buy a home this year have already been living in Canada for three or more years,” said Soper. “A short-term drop in the number of new immigrants and international students will not directly impact home sales in the current year, as most newcomers will rent their first home. We may feel the impact of fewer new Canadians in our residential investment market with less demand for rental units. Mitigating the impact of this trend is a surge in first-time buyer interest. Some landlords may choose to sell to eager millennial families if rental demand softens.”

Lengthy Economic Recovery and Revised Royal LePage Forecast

As home sellers return to the market, inventory levels are expected to rise, relieving the acute upward pressure on home prices that characterized the supply-constrained second quarter of 2020. Uncertainty clouds Canada’s real estate outlook as a lengthy recovery for the Canadian and world economies is expected. The negative impact on home prices should be muted by the balanced nature of Canadian housing, as chronic housing supply shortages offset dampened medium-term demand.

Royal LePage has revised its forecast slightly upward, with the national aggregate price expected to end 2020 up 2.3 per cent to $663,000 in the fourth quarter compared the same period in 2019.

REGIONAL SUMMARIES

Greater Toronto Area

Pent-up demand coupled with a lack of supply in the Greater Toronto Area (GTA) resulted in significant price appreciation in the second quarter. The aggregate price of a home in the GTA increased 10.0 per cent year-over-year to $899,001 in the second quarter of 2020. When broken down by housing type, the median price of a standard two-storey home increased 10.7 per cent year-over-year to $1,050,323 and the price of a bungalow rose 6.4 per cent year-over-year to $852,260. During the same period, condominiums in the region continued to see strong price appreciation, with the median price rising 9.3 per cent year-over-year to $599,235.

“Prior to the market disruption caused by the pandemic, the GTA was on track for double-digit price growth in 2020. While the first half of the second quarter saw market activity severely curtained, as soon as the market woke up in late May, sales quickly accelerated,” said Kevin Somers, chief operating officer, Royal LePage Real Estate Services Limited. “However, with listings not keeping pace and buyer competition high, we are again seeing double-digit price appreciation in the region.”

Royal LePage is forecasting that the aggregate price of a home in the Greater Toronto Area will increase 4.0 per cent to $882,000 in the fourth quarter of 2020 compared to the same quarter last year.

“While buyer demand outstripping inventory has been typical of the Toronto market, the return of buyers before sellers in the second half of the quarter amplified price growth,” said Somers. “Sellers are now returning and while buyers should not expect bargains, they may find the second half of the year more reasonable for inventory and price appreciation.”

Greater Montreal Area

The Greater Montreal Area aggregate home price rose 7.7 per cent year-over-year to $449,996, in the second quarter of 2020.

With the resumption of real estate brokerage activities on May 11, after being shut down for more than a month, all property categories in the region saw significant price appreciation. The jump in appreciation was largely due to substantial pent-up demand from buyers who had to put their activity on hold during the shut down.

Looking at prices by property type, the median price of a standard two-storey home in the Greater Montreal Area saw a strong increase of 8.7 per cent this quarter, compared to the second quarter of 2019, reaching $566,874. The median price of a bungalow rose 7.2 per cent year-over-year to $351,015, during the same period. Despite an increase of new listings in June, the median price of a condominium increased by 5.6 per cent year-over-year to $351,889.

“While we were experiencing unprecedented demand for real estate prior to the pandemic, the suspension of transactions during the lockdown has widened the gap between supply and demand,” said Dominic St-Pierre, vice president and general manager, Royal LePage for the Quebec region. “In my 18-year career, I have never seen such a tight ratio between the number of active listings and sales, reaching a new high in this sellers market, despite the fact that the Montreal region has been hit the hardest by the pandemic and lockdown in Canada.”

As a result, Royal LePage is forecasting the aggregate price of a home in the Greater Montreal Area will increase 3.5 per cent to $452,000 in the fourth quarter of 2020 compared to the same quarter last year.

Greater Vancouver

The aggregate price of a home in Greater Vancouver increased 1.9 per cent year-over-year to $1,109,069 in the second quarter of 2020. Broken out by housing type, the median price of a standard two-storey home in Greater Vancouver increased 3.7 per cent year-over-year to $1,455,027 in the second quarter. During the same period, the median price of a condominium in the region remained relatively flat, decreasing 0.4 per cent year-over-year to $638,242, while the median price of a bungalow decreased 1.1 per cent to $1,189,692.

“The Greater Vancouver real estate market is continuing its recovery that began in 2019. While the pandemic caused a significant disruption in early spring sales, continued low inventory has maintained prices,” said Randy Ryalls, general manager, Royal LePage Sterling Realty.

Real estate in the city of Vancouver posted healthy year-over-year gains in the second quarter. The median price of a two-story home rose 7.6 per cent to $2,088,932 compared to the same period in the previous year. During the second quarter, the median price of a bungalow rose 2.6 per cent year-over-year to $1,434,738, while the median price of a condominium decreased 2.0 per cent to $738,128.

“Stronger price appreciation for two-storey homes compared to condominiums reflects buyers’ preference for larger properties and less shared areas, a trend that has evolved as a result of the pandemic,” said Ryalls. “This has opened up excellent opportunities for those seeking city-centre condos.”

Royal LePage is forecasting that the aggregate price of a home in Greater Vancouver will increase modestly by 0.5 per cent to $1,087,000 in the fourth quarter of 2020 compared to the same quarter last year.

Ottawa

Ottawa’s aggregate home price rose significantly during the second quarter, rising 11.7 per cent year-over-year to $527,290. The median price of a standard two-storey home increased 10.6 per cent year-over-year to $552,429, while the median price of a bungalow saw a strong 14.4 per cent year-over-year increase to $538,409. During the same period, the median price of a condominium saw an increase of 14.5 per cent year-over-year to $370,425.

“Buyers have returned more quickly to the market than sellers resulting in fewer listings, increased competition and double-digit price gains over last year,” said Jason Ralph, managing partner, Royal LePage Team Realty. “The good news is that the number of listings is starting to grow and buyers can expect to have more selection in the second half of the year. However, Ottawa is expected to remain a seller’s market.”

Ralph added that Ottawa remains an attractive city to first-time buyers, especially those from the Greater Toronto Area. The city-centre remains the most popular choice, but towns within a reasonable drive to Ottawa such as Carp and even as far as Arnprior are attracting more interest.

Royal LePage is forecasting that the aggregate price of a home in Ottawa will increase 4.0 per cent in the fourth quarter of 2020 to $514,000 compared to the same quarter last year.

Calgary

The aggregate price of a home in Calgary remained relatively flat year-over-year, decreasing 0.2 per cent to $465,273 in the second quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 1.1 per cent year-over-year to $509,918, while the median price of a bungalow remained relatively flat, decreasing 0.1 per cent year-over-year to $488,838. Due to high inventory in the condominium segment, the median price of a condominium decreased 9.7 per cent year-over-year to $252,308.

“While sales are down year-to-date, activity in June was comparable with last year. Buyers have returned to the market more quickly than sellers; inventory has not kept pace,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “With the exception of the condominium market, Calgary real estate continues to shift towards a balanced market.”

Lyall added that first-time home buyers are driving sales in the region, which has increased competition and depleted inventory for listings within the $300,000 to $500,000 price range.

Royal LePage is forecasting that the aggregate price of a home in Calgary will decrease 1.5 per cent to $463,000 in the fourth quarter of 2020 compared to the same quarter last year.

Edmonton

The aggregate price of a home in Edmonton remained relatively flat, decreasing 0.6 per cent year-over-year to $371,902 in the second quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 2.8 per cent year-over-year to $436,221 and the median price of a bungalow decreased 5.4 per cent to $349,676. In the same period, the median price of a condominium decreased 7.7 per cent year-over-year to $205,005.

“Overall, Edmonton’s house prices have held their value despite the pandemic’s economic shock and resulting decline in sales,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. “Growing inventory of resale and new build condos has resulted in softened prices and excellent selection. Buyers are finding exactly what they are looking for.”

Shearer added that the market is being driven by young families. Houses priced under $450,000 in neighbourhoods popular with families are selling quickly.

Royal LePage is forecasting that the aggregate price of a home in Edmonton will decrease 1.0 per cent to $371,000 in the fourth quarter of 2020 compared to the same quarter last year.

Halifax

The aggregate price of a home in Halifax increased 2.2 per cent year-over-year to $333,954 in the second quarter. Broken out by housing type, the median price of a standard two-storey home increased 3.8 per cent year-over-year to $359,185. The median price of a bungalow was flat, decreasing 0.3 per cent year-over-year to $272,625, while the median price of a condominium saw a decrease of 8.3 per cent year-over-year to $296,738.

“Buyer competition is exceptionally high in downtown Halifax. Inventory is low and a good listing may last only a day or two on the market while drawing multiple offers,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “There has also been an increase in the number of exclusive transactions where the listing is sold before even making it to the market.”

Honsberger added that Nova Scotia’s rural and recreational real estate market has been very active.

“A common trend we are seeing is that buyers, after spending a lot of time home-bound and saving money, are deciding they want more from their home. They want more space. For some that means moving out of the city while others are staying in the city and upgrading,” said Honsberger.

Royal LePage is forecasting that the aggregate price of a home in Halifax will remain flat at $317,000 in the fourth quarter of 2020 compared to the same quarter last year.

Winnipeg

The aggregate price of a home in Winnipeg decreased 1.4 per cent year-over-year to $302,399 in the second quarter of 2020. During the same period, the median price of a bungalow decreased 0.8 per cent year-over-year to $287,715 and the median price of a condominium decreased 4.1 per cent year-over-year to $231,036. The median price of a standard two-storey home decreased 1.5 per cent year-over-year to $330,995.

“Winnipeg’s real estate market has proven to be extremely resilient and we are seeing signs of a ‘U’ shape recovery. While COVID-19 certainly pulled the market downwards for the first half of the second quarter, June sales are higher than last year. The market is energized and consumer confidence is back,” said Michael Froese, managing partner, Royal LePage Prime Real Estate.

Froese added that year-over-year sales activity in Winnipeg’s surrounding area is outperforming the city-centre.

“Communities outside of the city are growing in popularity, leading to price appreciation gains in those areas,” said Froese. “For many, remote work started as a necessity this spring but it is growing in popularity and employer acceptance. Buyers are now looking for larger properties with home offices. With less commuting, moving away from the city-centre to more affordable properties is appealing.”

Royal LePage is forecasting that the aggregate price of a home in Winnipeg will remain flat at $311,000 in the fourth quarter of 2020 compared to the same quarter last year.

Regina

The aggregate home price in Regina remained relatively flat in the second quarter, increasing 0.1 per cent year-over-year to $321,389. Broken out by housing type, the median price of a standard two-storey home increased 6.2 per cent year-over-year, rising to $402,716, while the median price of a bungalow decreased 3.3 per cent to $289,307. During the same period, the median price of a condominium decreased 13.0 per cent year-over-year to $194,936.

“From entry-level homes to the luxury segment, Regina’s real estate market awakened in June and is very active,” said Mike Duggleby, managing partner, Royal LePage Regina Realty. “We are seeing multiple offers and appropriately priced homes can sell within a week.”

Duggleby noted that sellers are returning to the market, which is expected to improve inventory over the summer.

“Sellers who had pulled their listing off the market and those who were not marketing their listing properly were watching the parade go by,” added Duggleby. “Seeing buyer demand grow over the quarter has encouraged sellers to come back.”

Royal LePage is forecasting that the aggregate price of a home in Regina will increase 1.0 per cent to $321,000 in the fourth quarter of 2020 compared to the same quarter last year.

Royal LePage Home Price Data and Forecasts:

Royal LePage House Price Survey Chart (Canada’s largest 64 housing markets): rlp.ca/Q2-2020-house-prices
Royal LePage Market Survey Forecast Chart: rlp.ca/Q2-2020-market-forecast

Royal LePage Royalty-Free Media Assets

Royal LePage’s media room contains royalty-free assets, such as images and b-roll, that are free for media use.

About the Royal LePage House Price Survey

The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 64 of the nation’s largest real estate markets. Housing values in the Royal LePage House Price Survey are based on the Royal LePage Canadian Real Estate Market Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 18,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.

quarterblog

Royal LePage Market Forecast: National Home Prices to Show Remarkable Resilience in 2020

  • Best case scenario forecast shows Canada’s aggregate home price could grow a modest 1% by the end of 2020
  • If the pandemic continues to heavily restrict business activity through late summer, a national home price decrease of 3% is expected by the end of 2020
  • The aggregate price of a home in Canada climbed 4.4 per cent year-over-year in Q1 2020
  • High demand and low inventory in Toronto, Montreal and Ottawa fueled rising home prices

TORONTO, April 14, 2020 – According to the Royal LePage House Price Survey and Market Survey Forecast released today, the aggregate[1] price of a home in Canada is expected to remain remarkably stable through the COVID-19 pandemic.

If the strict, stay-at-home restrictions characterizing the fight against COVID-19 are eased during the second quarter, prices are expected to end 2020 relatively flat, with the aggregate value of a Canadian home up a modest 1.0 per cent year-over-year, to $653,800. If the current tight restrictions on personal movement are sustained through the summer, the negative economic impact is expected to drive home prices down by 3.0 per cent ($627,900) year-over-year. In December 2019, Royal LePage forecast the national aggregate price to increase 3.2 per cent by the end of 2020. Due to COVID-19, expected price growth has been revised down almost 70 per cent compared to Royal LePage’s base scenario.

“The impact of COVID-19 on the Canadian economy has been swift and violent, with layoffs driving high levels of unemployment across the country. While it is sad that these people skewed strongly to young and to part-time workers, for the housing industry, the impact of these presumably temporary job losses will be limited as these groups are much less likely to buy and sell real estate,” said Phil Soper, president and CEO, Royal LePage. “From our experience with past recessions and real estate downturns, we are not expecting significant year-over-year price changes in 2020. Home price declines occur when the market experiences sustained low sales volume while inventory builds. Currently, the inventory of homes for sale in this country is very low, matching low sales volumes as people respect government mandates to stay at home.

“It is easy to mistakenly equate a handful of transactions at lower prices to a reset in the value of the nation’s housing stock. Distressed sales that occur during an economic crisis are a poor proxy for real estate value,” said Soper.

Broad-based measurements of industry activity point to a sharp decline in the four or five weeks since all provinces declared states of emergency. Home search activity on popular real estate websites are down more than 20 per cent versus norms. Home showings are down by more than two-thirds, based on Royal LePage sampling. Open house gatherings of people at a property for sale have been reduced to almost zero nationwide.

“As we ease out of strict stay-at-home regimens, sales volumes will return; traditional home sales practices will not,” continued Soper. “The popular ‘open house’ gathering of buyers on a spring afternoon is gone, and it won’t be coming back any time soon. The industry is leveraging technologies that allow a home to be shown remotely and social distancing protocols, where we restrict client interaction with our Realtors to limited one-on-one or two meetings, will continue for months and months. This process is inherently safer than a trip to the grocery store.”

The aggregate price of a home in Canada increased 4.4 per cent to $655,276 in the first quarter. When broken out by housing type, the median price of a two-storey home rose 5.1 per cent year-over-year to $770,005 while the median price of a bungalow and condominium rose 2.1 per cent and 4.4 per cent to $541,040 and $493,917, respectively. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian valuation company.

At the start of 2020, Canada’s housing market was experiencing a surge in home sales with growing upward pressure on major market home prices. This resulted from pent up demand that was released in the second half of 2019 when federal mortgage stress test measures implemented in 2018 had largely been absorbed by the market and consumer confidence began to build.

“If the fight against the coronavirus requires today’s tight stay-at-home mandates to remain in place for several months more, with no semblance of normal business activity allowed, temporary job losses will become permanent and consumer confidence will be harder to repair,” said Soper. “This would place downward pressure on both home sales volumes and prices.

“Equally, if the collective efforts of Canadians slow the spread of the disease to manageable levels, and if promising science and therapeutic drugs are announced, people will return to their jobs, market confidence will bounce back quickly, and we could see Canada’s real markets roar back to life, with 2020 transactions delayed but not eliminated.”

REGIONAL SUMMARIES

Greater Toronto Area

Housing demand outstripped supply in the Greater Toronto Area putting significant upward pressure on home prices. During the first quarter of 2020, the Greater Toronto Area aggregate home price rose 7.5 per cent year-over-year to $866,211.

When broken out by property type, the median price of a condominium saw the highest appreciation, rising 8.8 per cent year-over-year to $580,508. The median price of a two-storey home and bungalow rose 7.7 per cent and 3.7 per cent to $1,010,004 and $826,186, respectively.

“Toronto real estate appreciated rapidly in the first quarter as the demand that began in the second half of 2019 kept its momentum while inventory remained low. However, by mid-March both buyers and sellers had pulled back to adhere to social distancing measures and gauge the impact of the pandemic on the market,” said Kevin Somers, chief operating officer, Royal LePage Real Estate Services Limited.

If business activity resumes by the end of the second quarter, the Greater Toronto Area may see a year-over-year increase of 1.5 per cent to its aggregate home price by the end of 2020, increasing to $861,100. If business activity resumes in late summer 2020, the region could see a decrease of 0.5 per cent year-over-year in aggregate home price to $844,200.

Greater Montreal Area

During the first quarter of 2020, the Greater Montreal Area aggregate home price rose 7.2 per cent year-over-year to $441,979, representing the second consecutive quarterly year-over-year record increase in almost a decade. However, a decline in sales and new listings was observed in mid-March due to COVID-19.

When broken out by property type, the median price of a two-storey home and bungalow rose 8.0 per cent and 6.9 per cent year-over-year, respectively, to $557,594 and $344,043, while the median price of a condominium rose 5.0 per cent year-over-year to $344,962.

“Historically, the financial and real estate crises of the past 50 years that have disrupted consumer confidence and the number of real estate transactions have had little effect on property prices when analyzed over a 12 to 18 month period,” said Dominic St-Pierre, vice-president and general manager, Royal LePage, Quebec region. “While sales will temporarily slow down during the current pandemic, we do not foresee a significant decline in home prices, at least not for a sustained period, as housing and shelter is an essential need. Additionally, we expect that the numerous buyers who have put their purchase on hold will create a surge from pent-up demand,” he added.

If business activity resumes by the end of the second quarter, the Greater Montreal Area real estate market should remain relatively stable, with a year-over-year decrease of 0.5 per cent to its aggregate home price by the end of 2020, decreasing to $434,500 by the end of 2020. If business activity resumes in late summer 2020, the region’s market could see a decrease of 3.5 per cent year-over-year in aggregate home price to $421,400. This forecast factors in that Quebec is the only province in Canada where real estate brokerage is currently not included in the list of essential services.

Greater Vancouver

Despite tightening inventory and a surge in sales, the aggregate price of a home in Greater Vancouver decreased 2.1 per cent year-over-year to $1,083,166 in the first quarter of 2020.

Broken out by housing type, the median price of a two-storey home decreased 1.1 per cent year-over-year to $1,402,395, while the median price of a condominium and bungalow decreased 2.5 per cent and 4.2 per cent to $636,012 and $1,182,420, respectively.

“While the region had not quite returned to the 10-year average in home sales, the Greater Vancouver housing market was on a path for a vibrant spring market. We were seeing consumer confidence grow from the healthy demand seen in the entry-level segment that was extending upwards through the mid-range properties. We expected this upward trend to continue,” said Randy Ryalls, managing broker, Royal LePage Sterling Realty.  “Amid COVID-19 concerns, Greater Vancouver’s real estate activity began to slow in mid-March. While we do not know the duration of the pandemic, demand is still there and waiting for regular market activity to resume.”

The aggregate price of a home in the City of Vancouver rose 1.0 per cent year-over-year to $1,245,608 in the first quarter of 2020, driven by a gain of 4.9 per cent in the median price of a two-storey home. Both the median price of a bungalow and condominium declined year-over-year during the same period.

If business activity resumes by the end of the second quarter, Greater Vancouver may see a year-over-year gain of 0.5 per cent to its aggregate home price by the end of 2020, rising to $1,086,800. If business activity resumes in late summer 2020, the region could see a decrease of 2.5 per cent year-over-year in aggregate home price ($1,054,400).

“Buyers had come back to the market after sitting on the sidelines for a couple of years. They could not have predicted the impact of COVID-19 on their ability to transact this spring and have found themselves on the sidelines again,” said Ryalls. “If consumer confidence is intact when we are able to resume normal market activity, I expect we will see a significant pent up demand and a bump in sales. Buyers are still able to access a mortgage rate below 3 per cent, which is very attractive to homebuyers.”

Ottawa

Low inventory and high demand in the first quarter of 2020 put significant upward pressure on home prices. The aggregate price of a home in Ottawa increased 8.0 per cent year-over-year in the first quarter of 2020, crossing the half million dollar milestone for the first time to $502,808.

Broken out by housing type, the median price of a bungalow and condominium in Ottawa increased 12.0 per cent and 8.1 per cent year-over-year to $519,827 and $343,998, respectively, while the median price of a two-storey home in the region increased 6.9 per cent year-over-year to $526,584.

“Until mid-March, about 60 per cent of our listings were seeing multiple offers. The first quarter of 2020 was the extension of a seller’s market that began 18 months ago,” said John Rogan, broker of record, Royal LePage Performance Realty. “The impact of the coronavirus on Ottawa’s real estate market was quick and only those who had to buy and sell remain active.”

If business activity in the region resumes by the end of  the second quarter, Ottawa may see a year-over-year gain of 2.5 per cent to its aggregate home price by the end of 2020, rising to $506,500. If business activity resumes in late summer 2020, the region’s aggregate home price is expected to remain flat ($494,100).

“There are many unknowns about the long-term economic impact of COVID-19 on real estate. However, low inventory is supportive of home price appreciation, or at least home price stability. While we are not expecting to see 2019 price gains this year, at this stage it’s not likely that prices will notably decline either,” said Rogan.

Calgary

While sales were more brisk in the first quarter of 2020 compared to last year, the aggregate price of a home in Calgary remained relatively flat dipping 0.1 per cent year-over-year to $469,156.

Broken out by housing type, the median price of a two-storey home increased 0.9 per cent year-over-year to $514,713, while the median price of a bungalow was flat at $485,984. The median price of a condominium decreased 7.2 per cent to $261,778 compared to the first quarter of 2019.

“Sales are up year-to-date despite the dip in activity during the last two weeks of March,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “With a decline in listing inventory, we had expected to see modest price gains this spring. Now we are waiting to see how long the pandemic lasts and how much damage the economy sustains.”

If business activity resumes by the end of the second quarter, Calgary’s aggregate home price is expected to see a year-over-year decline of 0.5 per cent by the end of 2020, rising to $463,000. If business activity resumes in late summer 2020, the region could see a decrease of 4.0 per cent year-over-year in aggregate home price ($451,300).

Lyall added that while low oil prices will also have a negative impact on Calgary’s real estate, the risk is lower than the 2014 oil crisis. This is primarily because the region’s real estate market has been adjusting to declining oil prices over the years and the current low level of housing inventory.

“Oil companies have learned how to operate very efficiently since 2014 and with the pipeline going ahead, there is optimism that Calgary’s real estate market will find the momentum that was building before the pandemic took hold. We are hoping in Alberta that everyone will take the correct measures so we will plank the curve sooner rather than later,” said Lyall.

Edmonton

The aggregate price of a home in Edmonton decreased 1.4 per cent year-over-year to $371,118 in the first quarter of 2020.

Broken out by housing type, the median price of a standard two-storey home increased 1.5 per cent year-over-year to $430,732. The median price of a bungalow and condominium decreased 6.3 per cent and 5.3 per cent year-over-year to $351,481 and $215,223.

“Edmonton’s softened real estate prices and continued low interest rates were attracting buyers to the market as they saw good value in larger homes,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. “Now that the market has been paused by the pandemic, consumer confidence and employment levels will determine the new norm when market activity resumes.”

Shearer added that prior to mid-March, when the pandemic began impacting real estate activity, his brokerage had noticed a surge in investors looking for single-family homes with legal suites.

“Investors watch the market closely because their decisions are purely financial. They saw prices come down to a level where the likelihood of profitability was good,” said Shearer.

If business activity resumes by the end of the second quarter, Edmonton’s aggregate home price is expected to see a 1.0 per cent year-over-year decrease to $370,800, by the end of 2020. If business activity resumes in late summer, the region could see a decrease of 3.0 per cent year-over-year in aggregate home price ($363,300).

Halifax

After two years of strong home price appreciation, the aggregate price of a home in Halifax decreased 1.8 per cent year-over-year to $317,064 in the first quarter of 2020.

Broken out by housing type, the median price of a two-storey home and bungalow in the region decreased 0.8 per cent and 1.7 per cent year-over-year to $338,057 and $266,593, respectively, while the median price of a condominium decreased 13.4 per cent year-over-year to $284,039.

“2018 and 2019 were exceptional years for Halifax’s real estate market and going into 2020, we were sustaining momentum without significant changes in price or unit sales. It was a typical first quarter of the year for Halifax,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “We were expecting the market to pick up again in the spring but like other cities across Canada, the only buyers and sellers who have been transacting since mid-March are those who must buy or sell. The shoppers have taken a necessary step back.”

If business activity resumes by the end of the second quarter, Halifax’s aggregate home price during 2020 is expected to remain unchanged compared to the end of 2019 at $316,600. If business activity resumes in late summer, the region could see a decrease of 1.0 per cent year-over-year in aggregate home price ($313,400).

Winnipeg

The aggregate price of a home in Winnipeg increased 1.8 per cent year-over-year to $303,523 in the first quarter of 2020 with all three reporting property-types seeing year-over-year increases in median price.

Broken out by housing type, both the median price of a bungalow and condominium in the region increased 2.3 per cent year-over-year to $292,532 and $241,048, respectively, while the median price of a two-storey home in the region increased 1.3 per cent year-over-year to $326,627.

“Winnipeg had an excellent first quarter. Sales were up 12 per cent in the first quarter compared to 2019. Demand was high and consumer confidence was soaring,” said Michael Froese, broker and manager, Royal LePage Prime Real Estate. “Understandably, activity has slowed at the tail end of March as Manitobans’ priorities have shifted to help flatten the curve. There are still many people needing help to buy and sell real estate. With strong safety protocols in place, we are helping our customers get through this challenging time.”

If business activity resumes by the end of the second quarter, Winnipeg’s aggregate home price is expected to remain unchanged by the end of 2020, compared to home prices at the end of 2019, at $310,900. If the activity resumes in late summer, the region could see a decrease of 2.0 per cent year-over-year in aggregate home price ($304,700).

“While no major urban city will be able to avoid the negative economic impact of COVID-19, Winnipeg is well-positioned to remain relatively stable through the pandemic due to our strong underlying market fundamentals. We are resilient,” added Froese.

Regina

The aggregate price of a home in Regina decreased 2.1 per cent year-over-year to $317,400 in the first quarter of 2020.

Broken out by housing type, the median price of a two-storey home increased 4.8 per cent year-over-year to $399,564, while the median price of a bungalow and condominium decreased 6.5 per cent and 12.9 per cent to $284,033 and $194,470, respectively.

“We were beginning to see signals of a market recovery, which was disrupted by the pandemic,” said Mike Duggleby, broker and owner, Royal LePage Regina Realty. “However, Regina’s real estate market has seen its share of challenges over the past few years and prices are not likely to significantly decline.”

If business activity resumes by the end of the second quarter, Regina’s aggregate home price during 2020 is expected to decrease 2.0 per cent year-over-year to $311,000 by the end of 2020. If business activity resumes in late summer, the region could see a decrease of 4.0 per cent year-over-year in aggregate home price ($304,700).

Royal LePage Home Price Data and Forecasts:

Royal LePage’s media room contains royalty-free assets, such as images and b-roll, that are free for media use.

About the Royal LePage House Price Survey

The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 64 of the nation’s largest real estate markets. Housing values in the Royal LePage House Price Survey are based on the Royal LePage Canadian Real Estate Market Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 18,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.

fthb

What’s Motivating First-Time Homebuyers (FTBs), and What They’re Buying.

Genworth Canada’s 2019 First-Time Homeownership Study provides a snapshot of the demographics of Canada’s first-time homebuyers (FTBs), what’s motivating them and what they’re buying. The study surveyed more than 1,800 Canadians aged 25-40 who purchased their first home within the previous two years.

1. First-time homebuyers are pragmatic millennials.

There’s no denying that millennials play a huge role in the FTB space. The proportion of millennials who own a home, whether bought recently or previously, has increased from 55 per cent in 2015 to 60 per cent in 2019. The homeownership rate of all Canadians is 68 per cent, according to the 2016 Census. However, the proportion of those aged 25-40 who own a home has declined from 71 to 62 per cent over the same period.

2. Newcomers represent an important and growing segment of the first-time homebuyer space.

Twenty-five per cent of first-time buyers were immigrants, an increase from 19 per cent in 2017. The proportion of immigrants is even higher when looking at major urban pockets such as Vancouver and Toronto, where immigrants represented 43 per cent and 42 per cent of FTB respectively. In 2019, 15 per cent of FTB were newcomers who immigrated within the past 10 years.

3. Top motivators for buying are based on financial decisions.

The study reveals top motivators that impacted the buying decision of FTB include a strong belief that owning a home is a wiser financial decision (50 per cent) and wanting to own the home so they are in control of their investments (45 per cent). Other top motivators include saving enough for a down payment (44 per cent) and feeling financially confident that they can afford it (42 per cent).

4. First-time buyers are more financially savvy.

When it comes to their financial fitness, FTBs continue to significantly outperform the general population and the gap is widening.

The study showed that 76 per cent of FTBs have a long-term financial plan for retirement compared to 58 per cent of the general population, while 83 per cent have confidence in their long-term financial health compared to 61 per cent of the general population.

5. Most first-time homebuyers are driven by price.

Affordability is a key concern of today’s FTB. Price is the No. 1 consideration (95 per cent), even trumping square footage (90 per cent).

6. More buyers are considering their commute over house characteristics.

Forty-eight per cent of first-time buyers show preference towards homes that are closer to work, compared to 32 per cent who preferred a less expensive home with a longer commute.

7. Condominium purchases are growing.

The study reveals a growing share of condos being purchased by FTBs – 21 per cent, a five-per-cent jump compared to the 2017 study. New homebuyers with high-ratio mortgages are more likely to have bought a fully detached home (52 per cent). FTBs who bought into the condo market are more likely to have put a down payment of 20 per cent or more, purchased on their own and plan on staying in their current home for less than five years.

8. Most first-time homebuyers are doing their research.

A solid majority of FTBs say they got pre-approved for a mortgage before shopping for homes. The national average of FTBs who obtained a pre-approval before house shopping was 58 per cent, compared to 27 per cent who did so after finding the home, and 13 per cent who sought a pre-approval after negotiating the price of the home. These numbers do vary slightly by region. For example, FTBs in Toronto are more likely (18 per cent) than the national average to seek mortgage approval after negotiating the price of their home.

9. Down payment sources from gifts/loans are on the rise.

The study says 37 per cent of FTBs received a gift or loan from the Bank of Mom & Dad, up significantly from 32 per cent in the 2017 study. Half of those who received a gift or loan say that without it they would have delayed buying a home in order to save for a larger down payment, whereas 32 per cent would have purchased with a smaller down payment and 15 per cent would have sought a lower priced home.

10. Half of first-time buyers have financial fitness that is looking good or looking great.

Overall, the majority of first-time buyers across Canada feel financially confident after purchasing their first home. Forty-nine per cent of new homebuyers felt they were looking good or great after making the purchase, compared to 37 per cent in the general population who felt the same.

The survey results continue to show that FTBs are well educated, employed and gaining in household income year over year.  This, together with stronger financial fitness and careful planning is helping first-time homebuyers continue to make responsible and affordable homeownership decisions

Canadians can expect a vibrant spring real estate market, with home prices rising modestly

Royal LePage recommends a regional approach to mortgage stress test if federal government goes ahead with changes in 2020

  • Home prices increase 2.2 per cent in Q4 as buyers continue to move off the sidelines
  • Greater Toronto Area home prices heat up as demand outstrips supply
  • Greater Montreal Area sees strongest appreciation rate in almost a decade
  • For what is believed to be the last time this business cycle, Greater Vancouver home prices decline year-over-year — and stabilize on quarterly basis

TORONTO, January 9, 2020 – According to the Royal LePage House Price Survey released today, the aggregate[1] price of a home in Canada increased 2.2 per cent year-over-year to $648,544 in the fourth quarter of 2019. Similar to the third quarter, potential buyers are continuing to come back to the real estate market. In the first half of 2019, buyers had remained largely at the sidelines waiting to gauge the potential impact of the federal mortgage stress test.

“We have successfully navigated the first significant national housing market correction since the Great Recession a decade ago,” said Phil Soper, president and CEO, Royal LePage. “While the drop in the number of properties bought and sold during the 2018-19 downturn was large, the value of homes in Canada held up remarkably well, with only minor, single-digit declines in the areas of Ontario and B.C. that had experienced the most aggressive price inflation in recent years, and of course those regions still suffering from a downturn in the oil and gas sector.

“The federal government has signaled that changes could come to the mortgage stress test mechanism in 2020,” said Soper. “The stress test pushed people out of real estate markets across Canada temporarily. For the most part, buyers have adjusted, yet it still represents a significant hurdle as families pursue the dream of owning their own home.”

Soper added that the impact of the regulations-driven drop in demand is felt very differently in different parts of the country.

“We believe policy makers have the necessary experience to modify the tool to meet the reality of today’s Canada – that we have very different and varied economies, and by extension housing policy needs, from region to region,” said Soper.

The Royal LePage National House Price Composite is compiled from proprietary property data in 64 of the nation’s largest real estate markets. When broken out by housing type, the median price of a two-storey home rose 2.3 per cent year-over-year to $761,817, while the median price of a bungalow increased modestly by 0.7 per cent to $537,622. Data analyzed contains both resale and new build transactions, provided by Royal LePage’s sister company, RPS Real Property Solutions.

Across Canada, condominiums remained the fastest appreciating housing type, with the median price rising 3.3 per cent year-over-year to $487,525. Largely, condominium data is weighted towards the country’s largest urban centres where the majority of them are found. The median price of a condominium rose 7.8 per cent year-over-year to $565,919 in the Greater Toronto Area and 4.4 per cent year-over-year in the Greater Montreal Area to $338,148 during the fourth quarter. However, national price gains were offset by year-over-year declines in Greater Vancouver’s real estate market where the median price of a condominium decreased 3.4 per cent to $645,607. Nationally, after significant price gains in recent years in the condominium segment, double digit gains have become more rare as the price of a detached home is now more attractive as the gap between the two segments tightens, especially for millennials looking for more space for their growing families.

According to the Royal LePage Market Survey Forecast, released in December 2019, the aggregate price of a home in Canada is expected to increase 3.2 per cent year-over-year in 2020, rising to $669,800. The company’s 2020 forecast is dependent on consistent economic conditions, assuming no new housing policy changes. Royal LePage’s 2020 forecast includes regional aggregate and housing type forecasts.

MARKET SUMMARIES

Greater Toronto Area

Low supply, population growth and increased consumer confidence continued to fuel home prices in the Greater Toronto Area. In the fourth quarter, the aggregate price of a home in the region increased 4.8 per cent year-over-year, rising to $843,609. During the same period, the median price of a standard two-storey home and bungalow increased 4.4 and 2.4 per cent to $982,944 and $806,977 while condominiums rose 7.8 per cent to $565,919.

“The Greater Toronto Area is at a pivot point where we are seeing signs that prices could begin to rapidly increase,” said Kevin Somers, Chief Operating Officer, Royal LePage Real Estate Services Limited. “The region has a very low supply of listings while we are seeing more potential buyers trying to enter the market.”

Home price growth varied significantly across the region. While some areas showed stabilizing prices and healthy price growth, many regions, including the city centre, showed the potential for rapidly accelerating appreciation rates driven by high demand and low inventory. Significant price gains were seen in Pickering and Mississauga, where the aggregate price increased 9.7 per cent and 7.9 per cent year-over-year, respectively. The aggregate price of a home in the City of Toronto increased 6.6 per cent year-over-year.

The cities of Ajax and Oshawa were the only two areas to show a year-over-year decline in aggregate price. The aggregate price of a home in Ajax and Oshawa decreased 1.2 per cent and 1.8 per cent to $661,049 and $524,423, respectively.

Greater Montreal Area

In the fourth quarter of 2019, the aggregate price of a home in the Greater Montreal Area increased 6.3 per cent year-over-year to $433,993, the highest rate of appreciation since the fourth quarter of 2010. High demand coupled with low inventory fueled two-storey and bungalow home prices as their median prices rose 7.2 per cent and 5.9 per cent respectively to $548,374 and $336,981. The median price of a condominium in the region increased 4.4 per cent year-over-year to $338,148, posting the lowest increase among the three property types surveyed in the fourth quarter.

“The fourth quarter is historically the least active, but demand remained intact until the end of the year in the Greater Montreal Area,” explained Dominic St-Pierre, vice-president and general manager of Royal LePage for the Quebec region. “This increased competition has not only reduced inventory, it has changed seller behaviour. Sellers are more likely to wait until they find their next home before listing their current home. At this point, the seller is experiencing the same frustration as the buyer with little selection to choose from and escalating prices. This exacerbates the inventory problem.”

St-Pierre added that the upward trend in price appreciation over the past three years in the region stems from the continued good economic performance driving growth in demand across all buyer segments.

“We are currently in a ‘perfect storm’ for an exceptionally competitive spring market: interest rates are low; employment rates are healthy; listing inventory is limited; and, all buyer segments are active, including first-time buyers, baby boomers, newcomers and foreign buyers,” said St-Pierre.

Greater Vancouver

While Greater Vancouver continued to show a year-over-year decline in home prices, the fourth quarter showed signs of a market moving towards recovery. The aggregate price of a home in Greater Vancouver decreased 4.8 per cent year-over-year to $1,107,719 in the fourth quarter of 2019. In comparison, in the third quarter of 2019, the aggregate price of a home in the region had decreased 5.2 per cent compared to the same period in the previous year.

Broken out by housing type, the median price of a standard two-storey home and bungalow in Greater Vancouver decreased 4.7 per cent (-4.2% in Q3) and 6.7 per cent (-7.6% in Q3) year-over-year to $1,443,918 and $1,195,003, respectively, while the median price of a condominium in the region decreased 3.4 per cent (-5.9% in Q3) year-over-year to $645,607.

“Sales volume is up and inventory is decreasing. This is a good sign of a recovery on the horizon,” said Randy Ryalls, general manager, Royal LePage Sterling Realty. “We’re likely to see some moderate price growth after last year’s decline in prices. The window of opportunity for buyers to get a deal is closing quickly for most typical buyers. There remain some excellent opportunities in the luxury market.”

Ryalls added that Greater Vancouver’s real estate market was fairly balanced in the fourth quarter.

“Sellers were able to purchase a new home and then sell their current property in a pretty short window,” said Ryalls. “It was a healthy market for both buyers and sellers.”

Ottawa

Low inventory and a tight rental market continue to put upward pressure on Ottawa home prices. The aggregate price of a home in Ottawa had a healthy year-over-year increase of 5.3 per cent in the fourth quarter of 2019, rising to $493,947. The median price of a two-storey home increased 4.4 per cent year-over-year to $521,524 while the median price of a bungalow saw a strong increase, rising 10.1 per cent year-over-year to $501,195. During the same quarter, the median price of a condominium saw an increase of 2.1 per cent year-over-year to $329,828.

“Ottawa’s real estate market saw healthy sales activity through December,” said Kent Browne, broker and owner, Royal LePage TEAM Realty. “If demand continues to outstrip supply, we expect to see further price growth this spring.”

Browne added that Ottawa’s strong local economy, supported by good employment, entices Canadians from other regions looking to move.

Calgary

While the recovery of Calgary’s real estate market has been slow, quarter-over-quarter price trends have been encouraging for homeowners. The aggregate home price in Calgary decreased 2.3 per cent year-over-year to $469,916 in the fourth quarter of 2019. However, in the last six months of 2019, the aggregate price of a home in Calgary increased 2.1 per cent, from $460,089 in the second quarter of 2019.

Broken out by housing type, the median price of a two-storey home decreased 1.0 per cent year-over-year to $514,139, while the median price of a bungalow decreased 4.1 per cent year-over-year to $488,521. Meanwhile, the median price of a condominium decreased 6.9 per cent year-over-year to $265,488.

“Sales have improved and inventory has gone down in both detached houses and townhomes. Buyers are taking advantage of reduced prices, primarily in the single-family home segment,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “There is still a surplus of condos available offering excellent choice for buyers looking at turnkey properties with little maintenance.”

Edmonton

Home prices in Edmonton were relatively flat in the fourth quarter. The aggregate price of a home in Edmonton decreased 0.7 per cent year-over-year to $379,426. Broken out by housing type, the median price of a standard two-storey home increased 1.2  per cent year-over-year to $435,426 and the median price of a condominium remained relatively flat, increasing 0.3 per cent to $230,969. During the same period, the median price of a bungalow decreased 5.1 per cent year-over-year to $361,943.

“Home buyers in Edmonton have adjusted to the mortgage stress test and sellers are making appropriate compromises,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. “Sellers are optimistic when meeting buyers that they are ready to make a purchase.”

Shearer added that he expects to see moderate growth in home sales this spring but price growth will be modest in 2020.

Halifax

The aggregate price of a home in Halifax remained relatively flat in the fourth quarter of 2019, decreasing 0.6 per cent year-over-year to $318,768. The median price of a two-storey home increased 0.4 per cent year-over-year to $336,353. The median price of a bungalow was flat with a decrease of 0.2 per cent year-over-year to $267,036, while the median price of a condominium saw a decrease of 3.7 per cent year-over-year to $319,897.

“Momentum and consumer confidence is building in Halifax,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “Rental inventory is tight, and inventory among homes listed for sale is a little over half what it would have been last year. That’s the formula for price growth in the spring when demand escalates.”

Winnipeg

Winnipeg home prices saw strong gains in the fourth quarter. The aggregate home price in the region rose 7.4 per cent year-over-year to $321,346. During the same period the median price of a bungalow rose 5.3 per cent year-over-year and the median price of a condominium rose 1.1 per cent year-over-year to $306,293 and $232,875, respectively. The median price of a standard two-storey home increased 10.2 per cent year-over-year to $353,536.

“Sales are up across the detached home market, and sales of homes above $800,000 have been especially brisk,” said Michael Froese, managing partner, Royal LePage Prime Real Estate. “While demand has been strong, there is ample inventory, providing buyers choice and maintaining affordability.”

Regina

The aggregate home price in Regina decreased 2.8 per cent year-over-year to $314,937 in the fourth quarter. The median price of a two-storey home increased 1.2 per cent and the median price of a bungalow decreased by 4.6 per cent year-over-year, to $387,892 and $286,402, respectively. The median price of a condominium decreased 15.0 per cent year-over-year to $200,261.

“Resale two-storey homes were struggling to compete against new build homes in 2018 as builders reduced prices to encourage sales,” said Mike Duggleby, managing partner, Royal LePage Regina Realty. “Now that the oversupply of new build homes is under control, resale homes are beginning to regain some of those price concessions.”

For more regional analysis, visit Royal LePage’s media room to find city-specific releases. The media room also contains royalty-free assets, such as images and b-roll, that are free for media use.

Royal LePage National House Price Composite in the Fourth Quarter of 2019 (.PDF)

About the Royal LePage House Price Survey

The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 64 of the nation’s largest real estate markets. Housing values in the Royal LePage House Price Survey are based on the Royal LePage Canadian Real Estate Market Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 18,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.

For further information, please contact:

Stella Karami
Proof
skarami@getproof.com
(416) 969-2665

[1] Royal LePage’s aggregate home price is based on a weighted model using median prices and includes all housing types.

Canadian real estate market to appreciate 3.2% in 2020 reflecting similar price growth in both condo and detached segments

  • Low supply in the Greater Toronto Area expected to fuel home price growth in 2020
  • Greater Montreal Area forecast to see highest appreciation rate in 2020 among cities surveyed
  • Greater Vancouver house prices forecast to stabilize in 2020
  • Ottawa’s aggregate home price forecast to cross half million dollar mark in 2020

TORONTO, ON, December 12, 2019 –According to the Royal LePage Market Survey Forecast, Canadian home prices are expected to see healthy appreciation by the end of 2020, driven by low single-digit appreciation in both the condominium and detached home segments. The decline in high price appreciation in the condominium segment, in recent years, reflects a shift in millennial demand towards houses and is expected to reinvigorate sales activity in the suburbs. The aggregate[1] price of a home in Canada is forecast to rise 3.2 per cent year-over-year to $669,800 in 2020, with the median price of a condominium and two-storey detached house projected to increase 3.6 per cent and 3.1 per cent to $506,100 and $785,400, respectively. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian valuation company.

Demand drivers

The positive outlook for Canadian real estate in 2020 is based on healthy buyer demand. A segment of potential homeowners that once put home purchasing on hold beginning in January 2018, due to the introduction of the mortgage stress test, started returning to the market in the second half of 2019, driving competition and demand.

Another significant driver in demand is Canada’s healthy immigration rate. According to the Royal LePage Newcomer Survey[2] released in October 2019, newcomers to Canada are expected to purchase one in every five homes on the market over the next five years. Newcomers have high consumer confidence in Canadian real estate (86%) and arrive with savings to put towards the purchase of a home (75%).

“Our 2020 national forecast is based on a continuation of  healthy economic conditions,” said Phil Soper, president and CEO, Royal LePage. “Paradoxically, a slowdown in economic growth could cause us to revise the outlook upward. While one month does not a trend make, November’s surprisingly weak employment numbers may be the trigger that causes the Bank of Canada to join the U.S. Federal Reserve in lowering interest rates.

“Falling rates normally encourage new housing demand,” Soper continued. “This would mean further upward price pressure in regions where employment remains healthy, which is most of the country. That window to lower or flat home prices is closing or has closed for most Canadians.”

Peak millennials drive shift in demand from condominiums to houses

Most of Canada is seeing a shift in demand from condominiums to detached houses as peak millennials[3], those between the ages of 26 and 32 and the largest cohort within the powerful millennial consumer demographic, seek houses to accommodate growing families. Comparing the national median price of a condominium at the end of 2019 with 2014, the price has increased 48 per cent. Now this demographic is looking for more space and a yard. The resulting demand will put upward price pressure on detached homes. However, condominiums will remain in demand in regions where affordability restricts choice of housing types.

“The oldest peak millennials are now in their thirties,” said Soper. “This huge wave of Canadian consumers has been transforming Canadian real estate for a decade, putting more focus and upward price pressure on our condominium housing stock. With kids in hand and dog on leash, these parents are now eyeing the suburbs that their baby boomer parents so coveted. We predict that the period of disproportionately higher price appreciation in the condo segment is drawing to a close as interest in detached homes is reborn.”

Regional appreciation drivers

The median price of a two-storey detached home in the Greater Toronto Area is expected to increase 4.5 per cent year-over-year in 2020, rising to $1,027,200, while the median price of a condominium is forecast to increase 6.0 per cent to $600,000.

In Greater Vancouver, house price appreciation is expected to stabilize in 2020 after declining in 2019. The aggregate price of a home in the region is forecast to rise 1.5 per cent to $1,125,200. Overall, British Columbia’s outlook is positive. The province’s economic indicators continue to be bullish, and most forecasters expect growth in BC to be above the national average next year.

The Greater Montreal Area and Ottawa’s aggregate home prices are forecast to increase 5.5 per cent and 4.5 per cent to $457,900 and $516,200, respectively, in 2020 compared to 2019. The Greater Montreal Area is expected to see the highest aggregate home price appreciation of all regions analyzed. Price growth in both regions are fueled by healthy economies with good employment, affordable real estate and strong consumer confidence.

Calgary and Edmonton are expected to see modest home price gains in 2020 as prices began to stabilize on a quarter-over-quarter basis in 2019.

MARKET SUMMARIES

Greater Toronto Area

Tight market conditions influenced by low supply and a growing population continue to affect home prices in the Toronto core and the Greater Toronto Area. The aggregate price of a home in the Greater Toronto Area is forecast to increase 4.75 per cent year-over-year in 2020, rising to $883,700. The median price of a condominium is expected to increase 6.0 per cent year-over-year to $600,000 and the median price for a two-storey detached home is forecast to rise 4.5 per cent year-over-year to $1,027,200 by the end of next year.

“Inventory is critically low and it is possible that we could see a return to accelerating high price appreciation in the near term without new supply becoming available,” said Kevin Somers, Chief Operating Officer, Royal LePage Real Estate Services Limited. “Areas such as Richmond Hill and Markham, which were among the hardest hit by the recent market correction, have already shown signs of a recovery while areas closer to the city centre are showing significant momentum heading into 2020.”

Somers added that while many young families are growing out of their condominiums, moving into a larger property is not an option that many can afford. The First-Time Home Buyer Incentive may benefit single first-time condominium buyers, especially in the greater region, but it is unlikely to benefit buyers looking for a property suited for a family, unless modifications proposed in the liberal election platform increasing the qualifying purchase threshold to $800,000 actually take effect.

Greater Montreal Area

Supportive of a healthy real estate market, the Greater Montreal Area’s economic indicators are all positive – a strong job market, low and stable interest rates and very few clouds on the horizon that could slow the Quebec and Montreal economy in the year ahead.

Royal LePage forecasts that the aggregate price of a home in the Greater Montreal Area will increase 5.5 per cent year-over-year by year end 2020 to $457,900, which is similar to 2019’s rate of appreciation. During the same period, the median price of a two-storey detached home is forecast to rise by 6.0 per cent year-over-year to $581,300, while the median price of a condominium is expected to increase 5.0 per cent to $355,100. At this pace, the Greater Montreal Area real estate market will enter its fourth consecutive year of price appreciation above the 4 per cent mark.

“The real estate market in Montreal is showing no signs of slowing down,” said Dominic St-Pierre, vice president and general manager, Royal LePage, Quebec region. “Strong demand continues to favour sellers, reducing inventory and pushing prices upward across the region. The seller’s market that we have been witnessing for the past three years now has become the norm and is not going anywhere. Sales and price appreciation are both expected to accelerate in 2020.”

In the region, demand comes mainly from millennials and newcomers who seek quality of life and excellent employment opportunities. The region’s unemployment rate is low; workers have good job selection as well as opportunities for advancement and increased compensation. Millennials will remain a significant buyer segment of the condominium market, especially on the Island, and the First-Time Home Buyer Incentive will continue to help more first-time buyers access property in the year ahead.

“Incentives to increase access to property are very useful for first-time home buyers when it comes the time to purchase, but they also create more demand,” added St-Pierre. “It is important that government policy take into account measures that will offset imbalance between demand and supply to provide current and future generations with a better chance to own a home. The goal should be housing inventory that answers the needs of our growing population.”

Greater Vancouver

In Greater Vancouver, the aggregate price of a home is forecast to increase 1.5 per centin 2020, rising to $1,125,200. The median price of a standard two-storey home is expected to rise 1.25 per cent year-over-year to $1,460,700, while the median price of a condominium is forecast to increase 3.0 per cent to $666,900 by the end of next year.

“Sales have picked up significantly this fall and there is momentum in our market. Buyers who took a “wait and see” approach over the past 18 months are returning to the market looking to buy, confident that price drops have levelled off and may start to escalate,” said Randy Ryalls, Managing Broker, Royal LePage Sterling Realty. “We are seeing multiple offers for quality listings in high demand regions although not to the degree that we saw in 2016.”

Ryalls added that at the current rate of sales, inventory will be very low going into 2020 putting upward pressure on prices.

“The concern for potential buyers may be that prices will escalate quickly but they should also be concerned that they won’t get the same selection of listings or time to look around,” said Ryalls. “It varies between neighbourhoods, but areas such as East Vancouver are a seller’s market.”

Ryalls added that the unemployment rate in Greater Vancouver is low, the west coast economy is performing well, and the cost of borrowing remains low, which will motivate more buyers to come to the market.

Ottawa

In Ottawa, the aggregate price of a home is forecast to increase 4.5 per centyear-over-year to $516,200, crossing the half million dollar mark. During the same period, the median price of a condominium is expected to increase 3.5 per cent year-over-year to $341,300, while the median price for a two-storey detached home is forecast to rise 5.0 per cent year-over-year to $547,600. Government stability and sustained growth in the high-tech sector will continue to benefit Ottawa’s real estate market.

“Ottawa continues to be an affordable city with great jobs,” said Kent Browne, broker and owner, Royal LePage TEAM Realty. “Inventory is tight and there are few rental units available, which puts pressure on the overall real estate market. We are seeing multiple offers on homes between 300K and 500K and we expect this trend to continue into the new year.”

Browne added that there is a lot of condominium construction in the city including a new 45-storey condominium, the tallest in the city.

“Without more supply, we can expect to see home prices continue to appreciate in mid-single digits,” said Browne. “The federal government’s First-Time Buyer Incentive would have benefitted more people just a few years ago. In 2020, a typical home will sell for more than $500,000, which is the program’s cap.”

Calgary

In 2020, the aggregate price of a home in Calgary is forecast to increase 1.5 per centyear-over-year to $477,000. During the same period, the median price of a condominium is forecast to increase 0.75 per cent year-over-year to $267,500 and the median price of a two-storey detached home is forecast to rise 1.75 per cent year-over-year to $523,100.

“There are signs that the Calgary real estate market has touched its price floor and we are beginning a gradual return to balance,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “There’s positive news with the Trans Mountain Expansion, increased net migration and new jobs. Calgary’s housing market will see some buoyancy but it’s not going to be immediate.”

Lyall anticipates that future price and sales increases will only begin to be seen in the second quarter of 2020.

“Lenders have become more stringent, and many first-time home buyers have to improve their credit score, and wait a couple of years to save for a down payment and establish job stability. Saying that, we should still see more buyers entering the market this next year with continued low interest rates, positive migration, and less choice to rent with tighter vacancy rates,” said Lyall.

Edmonton

The aggregate  price of a home in Edmonton is forecast to increase 1.0 per cent to $383,200at the end of 2020. The median price of a condominium and two-storey detached home are forecast to increase 1.5 per cent to $234,500 and 0.75 per cent to $438,700, respectively, during the same period.

“We are seeing Edmonton move into a balanced market where buyers and sellers are negotiating. Sellers are compromising and buyers are realizing that prices are not going any lower,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. “In 2020, we should see a modest price bump but we are also expecting a healthy gain in sales activity.”

Shearer added that there are many challenges for Edmonton’s real estate market in 2020 including the outcome of negotiations with provincial government workers and resolving the ongoing struggle of the energy sector. However, positive indicators include increasing sales, lower inventory and quarter-over-quarter price stability in 2019.

“Despite previous uncertainty in the energy sector, the Alberta government’s focus on corporate tax cuts and making the province a more business-friendly area could potentially spur new job opportunities to come to the city,” added Shearer.

Halifax

In 2020, Halifax’s real estate demand will continue to be driven by strong population growth. Halifax’s growing population is putting pressure on both the real estate market and rental market leading to home price increases.

The aggregate price of a home in Halifax is forecast toincrease 1.75 per cent in 2020, rising to $323,800. Over the same period, the median price of a condominium is forecast to increase 3.75 per cent year-over-year to $330,400 and the median price for a two-storey detached home is forecast to rise 1.25 per cent to $340,600.

“We are now seeing more multiple offer situations in Halifax,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “In 2016, it would have been rare to have three offers on a property; now we can see up to 8 to 10. Inventory is tight, and buyers are having to adjust to the competition as momentum and consumer confidence drive the real estate market.”

Honsberger says provincial and local programs encouraging immigration and supporting business initiatives are contributing to the population increase. The Atlantic Provinces Economic Council forecasts continued economic growth in 2020.[4]

Winnipeg

In 2020, the aggregate price of a home in Winnipeg is forecast to remain flatyear-over-year at $321,300. During the same period, the median price of a condominium is forecast to increase 1.25 per cent year-over-year, rising to $235,800. The median price of a two-storey detached home is expected to decrease 0.25 per cent year-over-year to $352,600. Immigration will continue to be a strong driver in the real estate market.

“Winnipeg is a vibrant city that attracts young professionals looking to live in an affordable place where beautiful homes are not financially out of reach for most residents, ” said Michael Froese, broker and manager, Royal LePage Prime Real Estate. “Winnipeg’s diverse economy and steady employment insulate us somewhat from external economic factors, including a potential 2020 recession in the States.”

Froese attributes part of the region’s appeal to its expanding tech hub, with population growth continuing to fuel sales.

“The Canadian dream of owning a two-storey home in a family-friendly community with access to excellent schools is attainable in Winnipeg for newcomers with more modest savings,” said Froese.  “According to Royal LePage’s newcomer research released in October, over 40 per cent of home buying purchases in the Prairies are made by newcomers to Canada.”

Regina

The aggregate median price of a home in Regina is expected to remain flat at $315,000in 2020. During the same period, the median price of a two-storey detached home is forecast to decrease 0.5 per cent to $386,000 and the median price of a condominium is forecast to increase 3.5 per cent to $207,300 year-over-year.

Immigration continues to sustain real estate in Regina. The Saskatchewan Government’s initiative to attract more newcomers to the area is expected to increase demand in the coming year.

“Regina’s oversupply of listings has diminished greatly and there are fewer condominiums available on the market than previous years,” said Mike Duggleby, broker and owner, Royal LePage Regina Realty. “Potential buyers who have been waiting for prices to stabilize and begin a recovery are realizing that now is the time to enter the marketplace.”

Duggleby added that apartment-style condo inventory has reduced significantly, with very little available in the resale market in newer regions of the city. This will likely bring opportunities for builders to address the potential demand for new homes.

Royal LePage 2020 Market Survey Forecast (Download .PDF)

About the Royal LePage Market Survey Forecast

The Royal LePage Market Survey Forecast provides year-over-year price expectations for Canada’s nine largest markets. Housing values are based on the Royal LePage National House Price Composite, produced through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on trend analysis and market knowledge.

Contact us today for all your Real Estate needs.  Kathy & Dave – “Strength in Teamwork”.  See our blog for other interesting articles:  www.kathyanddave.ca

If you’re interested in learning more about the current housing market in the Niagara region, we would be happy to have a chat with you and answer any questions you may have. Come in for a visit or give us a call! It would be our pleasure to show you how selling your home in the current market could increase your financial gain.

December 2019 – Owning a home is becoming a pipedream for many millennials: KPMG in Canada

KPMG poll finds that soaring house prices and increasing debt has made home ownership far more difficult than for previous generations.

TORONTO, Dec. 5, 2019 /CNW/ – Soaring house prices and rising personal debt are making it impossible for many millennials, even those with good paying jobs, to ever afford a home, finds a new poll commissioned by KPMG in Canada.

While almost three-quarters (72 per cent) of millennials say their goal is to own a home, almost half (46 per cent) say home ownership is a pipedream, the KPMG Millennials and Retirement poll finds. The poll surveyed 2,500 Canadians, including 1,000 millennials between the ages of 23 and 38 who now represent the largest population generation in the country.

Housing – The Millennial Dilemma: KPMG in Canada Survey (CNW Group/KPMG LLP)

“The combination of rising house prices, high levels of personal debt and annual incomes that are just a fraction of the cost of buying a home compared with their parents’ generation, is pushing the dream of home ownership out of reach for many millennials,” says Martin Joyce, Partner, National Leader, Human & Social Services, KPMG. “This is particularly challenging in the markets of Vancouver and Toronto.”

Key Poll Findings:

  • 72 per cent of millennials say their goal is to own a home
  • Nearly half (46 per cent) of millennials say owning a home a pipedream
  • An equal number, 46 per cent of millennial homeowners, received a financial boost from their parents in order to buy a home
  • Two in five (38 per cent) believe their house won’t be worth as much in the future

As the most educated generation, millennials have incurred high levels of student debt and those who have been able to enter the housing market have taken on larger mortgages relative to their incomes than those who came before them, according to Statistics Canada. While millennials have higher incomes than previous cohorts, in part because of their higher educations, they are not necessarily better off, the poll indicates.

Household debt has been on an upward trend for the past 30 years and recently reached record highs, making home ownership even more unaffordable, especially in tight markets. Whereas the average debt-to-disposable income ratio in Canada was almost 87 per cent in 1990, it was more than 175 per cent at the end of 2018 – a trend that has caused the Bank of Canada to raise alarms about the country’s economic vulnerability.

Debt-to-income ratio is a key financial indicator and, for young millennials, that now stands at 216 per cent, far exceeding the 125 per cent for Gen-Xers and 80 per cent for baby boomers at the same age – primarily because of mortgage debt. Wage growth has also been slower than expected, the Bank of Canada has warned.

While millennials have proven to be willing to incur higher levels of debt to attain home ownership, they are less optimistic about the payoffs, the KPMG poll finds.

Millennials now take an average of 13 years to save for a 20 per cent down payment, while it took their parents just about five years in 1976, according to a Canadian Mortgage and Housing Corp. report.

“That’s eight fewer years that millennials might have for saving more for their retirement,” Mr. Joyce says. “If they do manage to save up and buy a house now and delay retirement savings, our poll finds 65 per cent of millennials fear they won’t have enough saved for retirement.”

It’s these fears that have spurred calls for action from the federal government and prompted such measures as the First-Time Home Buyer Incentive, and led Bank of Canada Governor Stephen Poloz to encourage the mortgage market to evolve to give Canadians more choice.

A majority of all the generations surveyed in the KPMG poll wants Ottawa to take action such as:

  • make housing more affordable;
  • make it easier to use RRSPs for down payments;
  • raise TFSA limits; and,
  • implement a new registered savings system, like RESPs for education savings, to make housing more affordable.

“It seems pretty clear that millennials are in a unique situation in terms of their ability to purchase a home – which has historically been a foundation for retirement stability – and most Canadians agree that the government has a role to play in making it a more achievable dream for many of them,” Mr. Joyce says. “It’s time to have a national conversation.”

KPMG in Canada used Methodify, a research automation platform, to study Canadian attitudes.

About KPMG in Canada

KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) is a limited liability partnership, established under the laws of Ontario, and the Canadian member firm of KPMG International Cooperative (“KPMG International”). KPMG has more than 7,000 professionals/employees in over 40 locations across Canada serving private-and public-sector clients. KPMG is consistently recognized as an employer of choice and one of the best places to work in the country.

The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.

About Kathy David Klune

November 2019 – Town of Fort Erie Housing Needs Study Reveals Need for Diversified Housing

The Town of Fort Erie has released is diversified housing needs report.  Please see more at:

https://forterie.civicweb.net/FileStorage/4B49A5938EC84067B0163E3E9755A0A4-PDS-63-2019%20Housing%20Needs%20Study%20Nov%2018.pdf

Contact us today for all your Real Estate needs.  Kathy & Dave – “Strength in Teamwork”.  See our blog for other interesting articles:  www.kathyanddave.ca

If you’re interested in learning more about the current housing market in the Niagara region, we would be happy to have a chat with you and answer any questions you may have. Come in for a visit or give us a call! It would be our pleasure to show you how selling your home in the current market could increase your financial gain.