Analysts duel over 2021 housing outlook

December 28, 2020

While Royal Bank is forecasting an 8 per cent decline in home prices in 2021 and both Canada and Housing Corp. and Moody’s predict double-digit drops in prices, real estate brokerage Royal LePage believes the current strong housing market and rising prices will continue into 2021.
Royal LePage says the average price of a home in Canada will increase 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 6 per cent and 2.25 per cent, respectively, to $890,100 and $522,700.
The brokerage said strong growth in home prices will be driven by a combination of robust demand, a shortage of properties for sale, and a low-interest rate environment.
“The leading indicators we analyze are pointing to a market that favours property sellers in the all-important spring of 2021,” said Phil Soper, Royal LePage president and CEO. “With policy makers all but promising record low interest rates to continue, the upward pressure on home prices will continue.”
Royal LePage forecasts Ottawa and Vancouver will see the largest increase in average home prices. Ottawa is expected to see an 11.5 per cent rise in its aggregate price (bringing it to $624,000), while Vancouver prices are predicted to increase by 9 per cent to $1.26 million, year-over-year. Meanwhile, the Greater Toronto Area is projected see its aggregate home price increase by 5.75 per cent to $990,300 in 2021.