Four trends that will shape Canadian real estate in 2021
Wednesday Mar 24th, 2021Share
The pandemic has changed the way we live and work. So, what about 2021 for real estate? The answer will largely depend on four ongoing trends.
#1. The urban exodus and the search for space
Finding adequate space at an affordable price has driven buyers into smaller exurban and rural communities where they can weather the next bout of planet-wide panic. The flight from urban areas is likely to be the most significant trend affecting Canadian real estate in the first half of 2021. Buyers who envision a remote-work future and want more space will have little choice but to bid on properties in smaller communities where homes are generally more affordable than city centres.
#2. The condo market will firm up — thanks to immigration
Owners seem optimistic that a combination of COVID-19 vaccinations and the federal government’s increased immigration targets for 2021 will boost condo demand back to pre-pandemic levels. While the country’s vaccine rollout has been the target of withering criticism, Canada already is ahead of schedule for hitting the Liberals’ target of 401,000 new permanent residents in 2021.
#3. Shrinking inventory, swelling prices
When a housing boom takes place in the midst of a global recession, it’s fair to wonder if traditional real estate fundamentals mean anything at all. The result has been a lack of available properties for sale. These days, the typical Canadian city is as likely to have a painful lack of housing supply. And with the aforementioned urban exodus eroding inventory in once well-stocked and slow-moving rural markets, pressure will be put on prices everywhere, not just in the country’s biggest cities.
#4. Mortgage rates on the rise
In early March, multiple Canadian mortgage rate comparison sites reported that the lowest rate for a five-year fixed-rate mortgage rose one-quarter of 1 percentage point to 1.64 per cent, the first such increase since Jan. of last year. As the country’s major banks raise their mortgage rates, you may want to move fast to secure a favourable rate.