Canadian Real Estate Market to appreciate 3.2% in 2020 Reflecting Similar Price Growth
Low supply in the Greater Toronto Area expected to fuel home price growth in
2020Greater Montreal Area forecast to see highest appreciation rate in 2020 among
cities surveyedGreater Vancouver house prices forecast to stabilize in 2020Ottawa's
aggregate home price forecast to cross half million dollar mark in 2020
TORONTO, Dec. 12, 2019 /CNW/ - According to the Royal LePage Market Survey Forecast, Canadian home prices are expected to see healthy appreciation by the end of 2020, driven by low single-digit appreciation in both the condominium and detached home segments. The decline in high price appreciation in the condominium segment, in recent years, reflects a shift in millennial demand towards houses and is expected to reinvigorate sales activity in the suburbs. The aggregate1 price of a home in Canada is forecast to rise 3.2 per cent year-over-year to $669,800 in 2020, with the median price of a condominium and two-storey detached house projected to increase 3.6 per cent and 3.1 per cent to $506,100 and $785,400, respectively. Price data, which includes both resale and new build, is provided by Royal LePage's sister company RPS Real Property Solutions, a leading Canadian valuation company.
The positive outlook for Canadian real estate in 2020 is based on healthy buyer demand. A segment of potential homeowners that once put home purchasing on hold beginning in January 2018, due to the introduction of the mortgage stress test, started returning to the market in the second half of 2019, driving competition and demand.
Another significant driver in demand is Canada's healthy immigration rate. According to the Royal LePage Newcomer Survey2 released in October 2019, newcomers to Canada are expected to purchase one in every five homes on the market over the next five years. Newcomers have high consumer confidence in Canadian real estate (86%) and arrive with savings to put towards the purchase of a home (75%).
"Our 2020 national forecast is based on a continuation of healthy economic conditions," said Phil Soper, president and CEO, Royal LePage. "Paradoxically, a slowdown in economic growth could cause us to revise the outlook upward. While one month does not a trend make, November's surprisingly weak employment numbers may be the trigger that causes the Bank of Canada to join the U.S. Federal Reserve in lowering interest rates".
"Falling rates normally encourage new housing demand," Soper continued. "This would mean further upward price pressure in regions where employment remains healthy, which is most of the country. That window to lower or flat home prices is closing or has closed for most Canadians."