Specialists believe 2021 will be still a seller’s market

A year ago, real estate experts said buyers might come back to the market after a period of weaker activity caused by the implementation of the mortgage stress test two years earlier. Moreover, one agency expected a reasonable 3.7% home prices gain.

But those forecasts were offered before the COVID-19 pandemic started and changed everything. Housing market froze because of the lockdown before it returned the activity. The actual average home prices rose by as much as 13.8% annually in November, the CREA says.

And what should we expect from this year? As move-up and move-over buyers keep pushing the market activity in many Canadian regions and the current lack of housing supply will likely go on, it will bring more difficulties for homebuyers and push prices even higher. Re/Max Canada predicts a 4-6% annual prices increase.

“We’ve seen many cases since the summer when households started thinking about radical changes of their lifestyle by moving to less-dense cities and neighbourhoods,” – noted Christopher Alexander, executive vice president of Ontario-Atlantic Canada. “This has led to unprecedented sales in 2020 in suburban and rural areas, and we believe the tendency will continue this year.”

In spite of the virus consequences, consumers are feeling quite optimistic. The recent poll by Leger conducted on behalf of Re/Max shows that 52% of Canadians consider housing to be one of the best investment variants in 2021. They are also confident that the national real estate market will be steady next year.

Here are the tendencies, housing experts expect to determine the 2021 real estate market:

1. Virtual will be more popular than real. We’ll see more virtual tours, online discussions, direct messaging and even virtual renovations. Open houses and in-person meetings may become a sign of the past, while private showings will be reserved for serious homebuyers only.
2. Switching from the city to suburbs. As remote work will remain even after the pandemic, people will keep searching for homes looking at less expensive markets outside the cities. Sometimes, people are downsizing to one property only, for instance, start living at their cottage.
3. A new wave of first-time buyers. Pandemic pets, babies and a possibility to work from home combined with the historically low interest rates are making it more attractive to become a homeowner.
4. Co-living will be more popular. After months spent with a family, living together will be more practical and comfortable for many families and friends. It’s not going to be limited by students only, it will evolve gradually. We may see a stronger demand for in-law suites and bigger common spaces, e.g. kitchens.