New Housing Price Index shows Canada’s real estate market is strong and resilient
According to Statistics Canada’s recent report on the New Housing Price Index for June of 2020, there was a slight gain in new home prices and a potential drastic change in the geography of housing demand.
The national new house prices were up by 0.1% monthly and by 1.3% annually. In case of the St. Catharines-Niagara region there was the largest monthly growth by 1%. Other, more affordable markets outside of major urban centres, including Guelph, Kitchener-Waterloo, and Kelowna reported similar hikes.
Real estate prices in Toronto haven’t changed since May, but the index was up by 0.2% from a year earlier.
Analysts believe such results point to strength and resiliency of the national real estate market, and a sharp shift from large cities, as homebuyers with remote work understood how much more they can get for the same money.
“In my opinion, it’s a drastic change,” – says Dr. Sherry Cooper, chief economist at DLC, noting a growing demand in suburbs.
“After the pandemic is over, we’ll see more remote employment, as not everyone will return to the downtown cores of the major cities,” – she says, pointing to weaker interest of certain residents in the city life with its public transit and crowded elevators. “I believe more people will work from home at least part-time. With the much lower real estate prices outside the core, people will benefit from it and get more for their money.”
Cooper is sure the CMHC’s gloom forecasts of a 9-18% declinein home prices and significant gains in delinquency rates will hardly be true. In her opinion, the circumstances of a lockdown, have led to a change and not to a weakening of Canada’s housing market drivers.