5 Mortgage and Housing Market Predictions for 2021

Monday Dec 21st, 2020


After a year unlike any other, naturally, activity in the Canadian housing market has also been operating, unlike any other year. And, as we look to the months to come, it’s safe to say that 2021 is shaping up to be another unprecedented year — at least based on new housing market predictions. From overnight lending rates remaining unchanged to real estate prices increasing in value, these are five mortgage and housing predictions for 2021.


1. The Bank of Canada will leave the overnight lending rate unchanged for the entire year The Bank will be “patient” in raising rates until pre-pandemic economic indicators are achieved. Therefore, the prime lending rate for variable-rate mortgages and HELOCs will remain unchanged.


2. Real estate prices (other than condos) will appreciate by 4 to 7% Real estate prices, for all housing types other than condos, will appreciate between 4 to 7%. With Canadians working from home, the demand will continue to be strong for more space. Larger homes outside of the city centre will see the strongest demand.


3. Condo prices in downtown urban centres will fall in the first half of the year More university students learning remotely, the lack of immigration, and the crackdown on Airbnb will all continue to weigh on condo prices in downtown urban centres in the first half of the year before stabilizing in the second half of 2021.This prediction is in line with forecasts from other Canadian economists.


4. Fixed rates will be modestly higher at the end of 2021 Canadians can expect bond yields to rise which will cause mortgage providers to modestly increase fixed rates, particularly at the end of 2021.


5. There will be no new mortgage regulation introduced in 2021 The government and regulators focus on the pandemic recovery, they will likely not introduce any new rules which would make it any harder for homebuyers to qualify for a mortgage — meaning that 2021 might be the perfect time to refinance your home or apply for a mortgage. While predictions such as these help paint an optimistic outlook for what’s to come, just like the pandemic, the Canadian housing market remains largely unpredictable, and only time will tell how the year will actually pan out.


Reference: https://cutt.ly/rhVTjdF ⠀


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