The cost of a detached home in Vancouver is expected to climb by roughly ten per cent in 2021, according to a new survey forecast.
According to the Royal LePage Market Survey Forecast, the aggregate price of a home in Canada is set to rise 5.5 per cent year-over-year to $746,100 in 2021, with the median price of a two-storey detached house and condominium projected to increase six per cent and 2.5 per cent to $890,100 and $522,700, respectively.
However, in Greater Vancouver, the aggregate price of a home in 2021 is forecast to climb nine per cent year-over-year to $1,262,600.
During the same period, the median price of a standard two-storey home is expected to rise ten per cent to $1,671,700, while the median price of a condominium is forecast to increase 3.5 per cent to $684,300.
“I am confident we will continue to see prices rise next year. Vancouver has proven to be a rather resilient market, with high demand and quite low inventory,” said Randy Ryalls, managing broker, Royal LePage Sterling Realty. “In March, we couldn’t have imagined this is where we’d be today, but despite public health concerns, consumer confidence remains high. With very attractive mortgage rates and the promise of a vaccine on the horizon, demand is likely to remain strong.”
Ryalls noted that the current market conditions create a tough situation for buyers, who are oftentimes competing for properties; something he expects is likely to continue through 2021.
“We are seeing multiple offers on almost every reasonably-priced detached listing. There simply isn’t enough inventory to meet the demand,” said Ryalls. “A balanced Vancouver market has about 15,000 active listings available. Right now, we’re sitting at roughly 10,000. If we reach the end of January without an injection of inventory, we will continue to see upward pressure on prices in the spring. I expect a strong seller’s market in 2021.”
Ryalls added that while the condominium market is not as strained as the single-family detached sector, demand remains strong.
Royal LePage Market Survey Forecast across Canada
Royal LePage reports that housing demand exceeded expectations in the second half of 2020. The supply of homes available for sale failed to keep pace, driving home prices higher and pushing unmet buyer demand into the new year.
“The leading indicators we analyze are pointing to a market that favours property sellers in the all-important spring of 2021,” said Phil Soper, president and CEO, Royal LePage. “Across the country, a large number of hopeful buyers intent on improving their housing situation were not able to find the home they were looking for this year, as the inventory of properties for sale came nowhere near to meeting surging demand. With policy makers all but promising record low, industry supportive interest rates to continue, we do not see this imbalance improving in the new year. The upward pressure on home prices will continue."
The value of single-family houses and homes outside of major urban markets are forecast to continue to outpace city core condominiums in the year ahead, driven both by Canadians seeking larger homes in a time where remote work has become more commonplace, and broad-based demographic trends, including baby-boomer retirement.
Royal Lepage also notes that the concern regarding the impact of mortgage deferrals that were issued during the summer "has eased significantly." It notes that many Canadians who deferred payments have begun repayment.
According to the Canada Mortgage and Housing Corporation, as of Sept. 30, 2020, the organization’s entire insured book of business has five per cent of loans with a payment deferral in place, which is a decline from approximately eight per cent in August.
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