Home prices will continue rising rapidly across broad swaths of Canada in 2021 as low housing supply forces buyers into fierce bidding wars.
That’s the message RBC Senior Economist Robert Hogue is sharing in the bank’s 2021 housing market outlook, published today.
Titled “Canada’s housing market headed for another record year in 2021,” the report identifies robust pre-pandemic housing demand that was carried forward to 2020’s second half as the primary reason why supply is so diminished across many provinces and major regional markets.
Hogue wrote that active home listings in late 2020 were significantly lower than the 10-year average in Ontario, Quebec, most of Atlantic Canada and BC.
“And that’s despite a surge in downtown condo listings since spring in Canada’s largest cities. With so few options to choose from (outside downtown condos), buyers will continue to compete fiercely,” he wrote.
Stiff buyer competition means prices will continue their swift upward march in these provinces, with Hogue predicting a 9.6 percent rise in Ontario for 2021. Quebec is forecast to record a nine percent jump, while BC is pegged for an 8.6 percent increase in property values.
Rather than fixating on the large urban markets in these provinces, the economist was quick to point out that rising prices isn’t just a “big-market story.”
“The pandemic has heated up prices in smaller markets too. In fact, we could see stronger gains in smaller markets than in core urban areas because downtown condo prices are likely to stay flat through much of 2021,” Hogue wrote.