When it comes to Canada’s housing market, things have been going better than just about anywhere else in the world. However, despite the worry about bidding wars, what is really pushing the Canadian housing market is a terrible imbalance of demand and supply. Buyers are searching for bigger homes but cannot seem to have them because there is not really enough land in or around the predominant cities where the people work.
Purchasing a home in Canada
In the constitutional monarchy of Canada, purchasing a home in St Albert has long since been viewed as a great way to middle-class security and safety. In fact, many Canadians actually live in some of the largest houses in the world. This being said, they also post much higher rates of direct homeownership than, say, the United Kingdom or the United States of America. With the worldwide pandemic in full swing, this has put an even larger premium on people’s extra space and backyards.
According to certain information put together from different real estate boards by the Bloomberg News, almost 60% of all home purchases in the recent past in 18 different, local communities around Montreal, Vancouver, Toronto, and Ottawa were actually for detached single-family houses. Surprisingly enough, only around 25% of the overall sales in these areas were actually for apartments.
However, when you see what has been constructed in these same cities and nearby communities over the last ten to twenty years, the actual percentages have been reversed: 60% of all new housing stock has become apartments, with only 25% of detached residential houses, according to data put together by Bloomberg News. This has ultimately led several desperate bidders to compete for a relentless constrained number of single-family homes in the end. Looking back at 2020, Canada’s direct home prices had gained close to 15%, with only the city of Luxembourg getting a larger increase, according to information from the Dallas Fed News.
The Canada Mortgage and Housing Corporation
In May 2020, data had shown drastic resales plummeting by a whopping 57%, while the average price of all Canadian homes fell by around 10%. Recent data that the Canada Mortgage and Housing Corporation sent out suggested that prices may even drop by close to 20% in its worst-case scenario. Nonetheless, they have rallied much more than 20% in certain places such as Toronto and Vancouver, where average homes and condos prices come close to the $1 million-dollar mark. Believe it or not, housing now officially makes up close to 10% of Canada’s GDP, which has been said to be around 50% higher than the normal average.
In 2021, RE/MAX Canada has anticipated a very healthy housing price increase, with many move-over and move-up buyers staying focused on driving activity in several areas around the Canadian housing market. Because of a continuous housing supply scarcity, this may present difficulties for many home buyers and put more pressure on general prices. Because of these constituents, the 2021 RE/MAX Housing Market Outlook Report averages a four to six percent growth in the general residential sales price worldwide.
The Canadian Property Bubble
Essentially, the Canadian property bubble describes an enormous elevation in Canadian real estate prices from the year 2002 to the present. This is a time in which many individuals have basically called it a “real estate bubble.” From the beginning of 2003 to 2018, the country of Canada viewed a substantial increase in property and home prices of around 337% in some Canadian cities. It was in 2018, that many home-owning prices were seen above 1990 levels when the country of Canada saw its last housing bubble.
As of March 2017, the average cost of purchasing and owning a home in the Toronto area had substantially flourished 33% in only one year alone, with around 19% of the increase happening in the last two months. Another surprising fact, many less-wanted semi-detached homes had jumped to $1 million in price value. Several suburban locations had seen big price elevations, too, as many homes that had not seen many design upgrades were now being successfully sold well over the price asked.
All in all, the country of Canada has truly seen homeownership as an essential part of securing a cozy place in the world. Maintaining the health and security of Canada’s housing market is vital to ensuring the protection of local communities. Companies like Bermont Realty are here to help you navigate this tricky market. Always be sure to trust an accredited and licensed real estate agent.