2020 Outlook: Real Estate Market Forecast
After a two-year slump, the future's looking bright again for Canadian real estate. Economists expect positive growth in the national housing market in 2020, supported by low mortgage rates, a solid job market, and a rising population.
In fact, in a recent report, RBC Economics called 2019 a “turning point for Canada’s housing market.”1 To understand why—and where the market is headed—we take a closer look at some of the key indicators and summarize expert predictions for the coming year.
More importantly, we explain what impact these changes will have on buyers, sellers, and homeowners in 2020 and beyond.
SALES VOLUME WILL RISE
After peaking in 2016, Canadian home sales volume fell in 2017 and 2018. Fortunately, we saw a turnaround last year as sales began to recover, and economists expect the trend to continue. In a recent “Housing Market Outlook” report, the Canada Mortgage and Housing Corporation (CMHC) predicts “home sales will increase in 2020 and 2021, offsetting the declines observed since 2016 by the end of the forecast horizon.”2
The Canadian Real Estate Association expects to see a modest rate of growth this year. “Sales are forecast to continue to improve through 2020, albeit slowly. National home sales are forecast to rise by 7.5% to 518,100 units next year, with most of this increase reflecting a weak start to 2019 rather than a significant change in sales trends out to the end of next year.”3
What triggered this rebound in market activity? According to Rishi Sondhi of TD Economics, “The beneficial combination of solid job markets, rising household incomes, healthy population growth, further distance from restrictive government policies and low mortgage rates have given a boost to demand.”4
RBC Economics believes the main impediment to growth will be a lack of supply to meet the reinvigorated demand. “In fact, low inventories...