The New Normal: A Strong Housing Market Expected to Continue into 2021
Circumstances like a once-in-a-hundred-years pandemic and historic inventory shortages might have made you assume that the housing market would lose steam, but there is plenty of evidence to the contrary. As Canadian Real Estate Association (CREA) senior economist, Shaun Cathcart noted, “records [are continually] being broken” in the residential property market.1
Indeed, rather than a slowdown, we are continuing to experience a surprisingly robust real estate market across the country. And experts estimate that these conditions are likely to last into the new year. TD Bank Group Economist Rishi Sondhi predicts that high home prices will persist for the rest of 2020.2
Market conditions like fewer available listings, changing criteria for desired homes, and record-low mortgage rates are changing the way people buy and sell homes, most likely in a lasting way. But this sustained activity, even in the uncertainty that is 2020, proves Canadians still view real estate as a sound investment. The only question now is how you can take advantage of the housing market’s “new normal.” In this article, I will explain everything you need to know to achieve your goals.
FEWER LISTINGS EQUALS A SELLER’S’ MARKET
Inventory, meaning the number of homes for sale, is at a record low across the country.
According to statistics from RBC Economics, the majority of Canada is experiencing tighter demand versus supply conditions than the country has seen in nearly two decades.3 And at the end of September, there were just 2.6 months of inventory on a national basis. That restricts supply, which increases prices if demand remains unchanged.4
There has been a bit of relief in terms of inventory. New-home construction hit levels in August that the country had not seen since 2007, but then waned somewhat in September with housing starts down in eight of 10 provinces....