CREA predicts record housing sales in 2021

According to the Canadian Real Estate Association (CREA), we’ll see record high home sales in 2021, followed by a cooling phase next year.

CREA predicts almost 702,000 sales through Canadian MLS systems for this year. Meanwhile, last year showed 551,262 sales. Next year, 614,000 sales are expected.

The association says the national average home price will show an annual increase by 16.5%, exceeding $665,000 this year and reaching $679,341 in 2022.

Such strong forecasts show that the pandemic hasn’t pushed away buyers, who have entered the expensive markets massively even amid numerous layoffs and a high jobless rate. Over the second half of 2020 and at the beginning of 2021, realtors saw bidding wars and many offers for suburban houses or properties that needed renovations.

In CREA’s opinion, those tendencies will not vanish in the nearest future.

The recent report by CREA shows there were 58,021 home sales last month, It’s 6.6% more than in January and 39.2% more than a year earlier.

In addition to it, the actual national average home price in February was up by 25% annually and reached a record number of $678,091.

CREA says such increases were seen not only in usually hot markets of Toronto or Vancouver.

The biggest annual hikes (more than 35%) were reported in the Lakelands region of Ontario, Tillsonburg District and Woodstock-Ingersoll.

Hamilton, Guelph, Cambridge, Brantford, Kitchener-Waterloo, and Peterborough showed prices gains of about 25-30%. Montreal reported an 18.8% increase, while Vancouver Island, Winnipeg, the Greater Toronto Area and Quebec saw 10-15% hikes.

CREA senior economist Shaun Cathcart believes COVID-19 and restrained supply are the main drivers of those trends.

“We are right at the beginning of the first undisturbed (by new measures or lockdown) spring real estate market in many years. Moreover, we have the most extreme demand-supply imbalance,” – noted Cathcart.

He says the demand is growing because of regulatory changes implemented even before the pandemic, and because people now need their own homes to survive through this period. Besides, many want to buy a property before prices grow even higher and while mortgage rates are still low.

CREA expects the market supply to normalize eventually, but it will take some time.