Attention prospective homeowners: you can expect house prices in Canada to grow at a slow and steady pace over the next two years. That’s what a survey of 20 analysts, conducted by Reuters, predicts.
Experts foresee prices will increase by an average of 1.1 per cent this year, by 1.9 per cent in 2020, and by 3 per cent in 2021. Specifically, in Canada’s most expensive cities Toronto and Vancouver, house prices are predicted to increase by 3.5 and 3 per cent, respectively, in two years’ time.
The poll’s national prediction is similar to a previous report by RE/MAX 2019 Housing Market Outlook, which noted an expected price increase of 1.7 per cent in 2019. For reference, the national average home price in 2018 was $495,100, Point2 Homes reports.
This slow, upward trend in national house prices is mainly affected by demand.
“The Canadian housing market’s major shift from homeownership to rental continues,” Sebastien Lavoie, chief economist at Laurentian Bank Securities, said.
“The stars are aligned for further strengthening in activity in the rental market: demand coming from atypical jobs and immigration, higher rates restraining some households to buy a home, the preference of millennials to delay the purchase of a home later in their life cycle.”
Canadians are hesitant when it comes to buying real estate. In RE/MAX’s 2019 report, they found only 36 per cent of Canadians are considering purchasing property in the next five years. This number is down 48 per cent from the year before.
High interest rates, the new mortgage stress test, and a slow economy are all contributing factors. But despite this, the majority of experts in the Reuters’ poll noted that single-family homes are expected to become more affordable in 2019.