CREA predicts home prices growth in 2020

The latest report by the Canadian Real Estate Association (CREA) shows the national housing prices kept rebounding last month.

According to CREA, benchmark prices rose by 3.4% from December 2018 and reached $643,700 in the 19 markets CREA tracks. Meanwhile, the average home price went up by 9.6% annually to $517,000. (The benchmark price is more accurate as it excludes the most and least expensive properties.)

“The pace of home price gains went up closer to the end of 2019,” - noted Gregory Klump, CREA’s chief economist. “In case the recent results are just a beginning, the price tendencies in British Columbia, the GTA, Ottawa and Montreal may raise the national result in 2020, despite weak pricing environment among real estate markets in the Prairie region.”

This difference between Ontario and the Prairies has been there for more than a year. Ontario real estate shows growing prices, with excessive demand from Toronto already affecting small urban centres in the province. At the same time, prices for home in the Prairies have been declining for about 5 years.

Toronto saw a significant real estate prices increase in 2019

It looks like Toronto is on its peak of recovery following about 2 years of declines, caused by the implementation of government cooling measures in 2017.

As you know, home sales are growing. However, as the market supply remains limited, the prices are also going up sharply.

According to the recent report by Zoocasa, there were 87,825 homes sold through MLS across the GTA last year, which is 12.6% more than a year earlier.

The average home price in Toronto rose by 5.6% during 2019 and reached $883,520, Zoocasa says.

Business confidence in Canada is growing

According to the recent poll by the Bank of Canada, business confidence has increased slightly due to weaker global trade tension. However, the Prairies still remain a vulnerable area.

The survey was based on interviews with senior management at about 100 firms. It shows that outside of the energy-producing regions, there are numerous reports of improved indicators for future sales.

The foreign demand, especially from the U.S., keeps pushing up exports, and forecasts for U.S. economic growth have improved amid weakening trade tensions.