Canadian home prices have been on a roll in recent times and why not! Demand has been rising steadily for housing across the nation and with the revival of the real estate market and higher sales figures, prices are also demonstrating consistent growth as per experts.
Yet, property keeps getting slightly costlier in Canada as outlined by experts and with demand expected to rise manifold in the near future, home prices should be climbing up swiftly over the next couple of years.
What studies reveal about Canadian home prices
Studies reveal that average home pricing is expected to touch the highest/peak levels over the next couple of years ever since the year 2017. This naturally means that homes will get costlier in several expensive housing markets in the nation. The CMHC (Canada Mortgage and Housing Corporation) has already released its 2020 Housing Market Outlook and this study indicates that buying homes will steadily get costlier over the next few years.
CMHC has already predicted that growth in home prices will start in a big way from the years 2020 and 2021 onwards. This will naturally take average home pricing into much higher territory than it witnessed in the year 2017. Housing starts are expected to gain more stability in these two years and will be at thresholds quite similar to long-term averages. This will come after two years of a continual decline from peak levels in the year 2017 as per the study. Home prices and resale transactions should both recover strongly from the declines of the past as per leading economists and industry watchers. As per this major study, national average pricing for homes sold in the year 2017 on the MLS system touched $511,830. Yet, this figure, once delineated into average pricing from every Canadian province throws up interesting statistics.
The average home prices are a lot higher for B.C. (British Columbia) and Ontario as compared to other provinces such as Saskatchewan which have lower average home prices. The national average threshold thus balances out higher levels in B.C. and Ontario on account of lower rates in other Canadian provinces. The year 2019 should witness a steady decline overall (annual) for average home prices in spite of the growth seen in recent months, as compared to the year 2017. Yet, prices will keep rising as they are doing now.
Other key aspects worth noting
CMHC has already forecasted Ontario’s leading position in terms of increases in average home prices for the next two years and it will be followed by B.C. and Quebec as well. Other provinces will see slight increases in this time period as compared to these three provinces as per this report. In the year 2017, the average home buying cost was fluctuating across provinces and touched extreme record levels in some areas of the country. As per several studies, nominal housing prices came down by 19% in July in the year 2017 for Toronto as compared to the peak level of $918,138 witnessed in April, 2017. Sales figures also came down by 49% in this duration as per reports.
Yet, that is history now as the Toronto real estate market rebounds with considerable sales and price growth alike. It should be the same story in several parts of the nation as well. Population levels and overall income will keep growing and this will naturally support the growth in home sales volumes and also the increase in average home prices as per the CMHC study. The average home prices may rise steadily to anywhere around $531,000 for 2020 while this could jump up to $569,600 in the year 2021 as per predictions. Sales figures will go up considerably for the years 2020 and 2021 as well, making up for the decline over the last 2-3 years. Disposable income of average Canadian households will increase, leading an increase in real estate investments throughout the nation.