COVID-19 and Market Projections
This New Year is quite unlike the others we have rang in. With the pandemic still ongoing, its longterm effects on the housing market are still fairly unknown. Last year, a lot of projections were made in terms of what the market would look like in 2021, and recently, Remax Canada released a report detailing their outlook for the coming months. Here’s a run down of some of the trends they predict.
Market activity is normally strongly driven by “move-up buyers” who upgrade their homes from smaller suburban properties to larger, more expensive, urban properties. In the last few years, however, there’s been a rise in “move-over buyers” which has only been spurred by the pandemic. Move-over buyers are homeowners looking for a change in lifestyle and they are finding it not in urban areas, but rather the opposite.
Move-Up Buyers
Homeowners that periodically trade their property for one that is bigger and/or more expensive
Usually looking to invest in their homes in order to trade them for profit in the future
Upgrading their home in order to move to urban and downtown areas (closer to workplaces and post-secondary institutions)
Purchasing larger homes to start/grow their families
Move-Over Buyers
Homeowners looking to balance several factors such as affordability, size as well as infrastructure; some of which are not available in downtown areas
Usually driving market activity in suburban places such as Mississauga, Brampton, Hamilton and even Kingston
Spurred by lifestyle changes, especially for young and first-time buyers looking to start a family or switch to a quieter daily routine
The migration of homeowners to cities outside of urban centres are driving prices up in those areas, which is one of the reasons Remax projects average sale prices will increase between 4-6% in 2021. This surge was one of the only factors directly influenced by the pandemic, with most of the housing market remaining unaffected.
As for urban centres such as Toronto, move-up buyers are still stimulating activity in their markets as well as luxury homes in other local markets. Housing supply was reported to be short in these areas and Remax does not expect it to improve in 2021. This coupled with the demand in such densely populated areas is another factor that is driving sale prices up, with Ontario’s expected to rise around 7-12%.
A small percent of market activity in urban centres is also driven by both immigration and international students.
Western and Atlantic Canada
Remax’s projections for Vancouver and its surrounding areas are positive and steady. Markets are expected to remain balanced, “with seemingly no impact felt by the pandemic.” The report assesses that seller’s markets are likely in this region for three reasons: high demand, low supply and low interest rates.
Seller’s markets also dominate most of Atlantic Canada, with move-over buyers saturating markets in Moncton, Saint John and Halifax. These are homeowners who are either ready to retire or are permanently working from home due to the pandemic. Housing prices are expected to rise all over Canada, although not nearly as much as in Ontario.
Overall, Remax’s projection for Canada’s housing market in the 2021 is positive and without any major hurdles. It seems that the worst of the turbulence is out of the way and left behind in 2020, but proceeding into the new year with caution is always the best way to go!