Canadian housing market expected to remain active for the remainder of 2020 due to pent-up demand and low inventory levels, say RE/MAX brokers and agents
Canadians showing more interest in suburban and rural homes for sale, as work and life dynamics shift
- Canadian housing prices anticipated to increase by 4.6% in the third and fourth quarter according to RE/MAX brokers and agents. This is compared to the earlier prediction by RE/MAX brokers and agents of +3.7% at the start of the year.
- 32% of Canadians no longer want to live in urban centres, opting for rural or suburban communities instead.
- Canadians are almost equally split in their confidence in Canadian housing market, with 39% as confident as they were before the pandemic, and 37% slightly less confident.
Leading indicators from RE/MAX brokers and agents across the Canadian housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6 per cent during the remainder of the year. This is compared to the 3.7 per cent increase that was predicted in late 2019.
The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32 per cent of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group.
Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44 per cent of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.
“While COVID-19 lockdowns slowed the Canadian housing market at the start of a typically busy spring market, activity bounced back by early summer in many regions, including Vancouver and Toronto,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained, and current market activity further exemplifies this. Many homebuyers are now exploring different neighbourhoods that better suit their new lifestyles, and real estate agents are getting busier and working more with buyers from different major cities. According to our brokers and agents across the RE/MAX network, Canada’s fall market is expected to see spring market-like activity.”
Looking ahead at the Canadian housing market
RE/MAX brokers across Canada were asked to provide an analysis on market activity during COVID-19 lockdowns, assessing how their regions have bounced back with easing restrictions. They also provided a prediction of market activity for the remainder of 2020. Unsurprisingly, most provinces experienced a slowdown in March and April, with significant drops in activity up to 70 per cent year-over-year. Prices, however, have remained stable across the country. Heading into fall, 50 per cent of RE/MAX brokers and agents surveyed anticipate a modest increase in average residential sale prices.
Western Canada Housing Market
While COVID-19 lockdowns in March and April slowed down the housing market in Western Canada, transactions in Kelowna, Saskatoon and Vancouver resumed by May, with sales in both May and June surpassing year-over-year levels. Many buyers put their plans on hold at the peak of COVID-19 lockdowns, but they returned to the market quickly to make up for lost time. Edmonton’s housing market quickly bounced back to pre-COVID levels in June, while Saskatoon experienced its busiest June in years; this momentum is anticipated to continue into the fall market, with RE/MAX brokers and agents estimating a three-per-cent increase in average residential sale prices for the remainder of the year. Overall, brokers and agents in Western Canada say the potential buyers they are talking to are not too concerned with a potential second wave of COVID-19 impacting their real estate journey, and RE/MAX brokers are estimating steady activity to round out 2020.
Winnipeg Housing Market Outlook (Fall 2020)
While the Winnipeg housing market remained strong in the first two weeks of March, the region saw a decline in home sales between April and May due to COVID-19 lockdowns. However, activity bounced back by the end of June and into July, paving the way for recovery in the region.
With low inventory and pent-up demand, prices for both single detached homes and condominiums have increased by 5% between Q2 and the beginning of Q3. Consumer confidence remains high in the region, and prices are expected to remain stable, with a 2% increase in prices for all property types expected in Winnipeg, Manitoba for the remainder of the year.
The Winnipeg housing market is currently balanced, which is expected to prevail in 2020 as a result of reasonable prices and an ample supply of inventory. The average residential sale price expectation for Winnipeg in 2020 is +2% due to a modest increase in commercial development.
Currently, there are 4 months of inventory left and in 2020 this should remain the same. The most popular type of properties are two-story detached homes and 2020 will see a shift of more new Canadians looking for homes in Winnipeg. The condo market is primarily driven by single millennials and retirees who are looking for townhouses with two or more bedrooms.
The hottest neighbourhood in 2020 will be Amber Gates due to new development in the area, including a new school and more commercial properties. Winnipeg will see the luxury and condo markets remain steady in 2020, with move up and first-time homebuyers driving demand.
From a national perspective, RE/MAX anticipates a levelling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price.
As more Canadians have adjusted to the mortgage stress test and older Millennials move into their peak earning years, it is anticipated that they will drive the market in 2020, particularly single Millennials and young couples. A recent Leger survey conducted by RE/MAX found that more than half (51 per cent) of Canadians are considering buying a property in the next five years, especially those under the age of 45.