When COVID-19 first sprang up at the tail-end of 2019, many people throughout the world believed that multiple industries would be hit hard. Canadian economists said COVID-19 would cripple the real estate industry, too. However, there have been forecasts throughout all of 2020 about how 2021 will be for prospective home buyers. There is a mix of good and bad news, but here are some predictions about whether you should buy a home in 2021 or wait.
Home Prices Could Drop Across Canada
Moody’s Analytics, Inc has been busy crunching numbers, and they came out with a grave headline: there are too many homes for sale in some areas, and that will impact 2021. Yet, for a first time home buyer, having too many homes flooding the market during a time when interest and mortgage rates are low is advantageous. Imagine saving even 1% on your mortgage and getting a house in a commuter’s paradise?
In fact, Moody’s said that the entire housing market might see a drop in prices of 6.5% for condo units and 6.7% for single-family homes. This will largely affect places through British Columbia, but there are other areas where prices are dropping, too.
Montreal Will Be More Expensive 2021
Now, for a conflicting take on the price drop throughout the nation. Some surveys have forecast that heavily populated cities are going to get more expensive. Montreal, for instance, is posed to remain a seller’s market. Going into 2021, the price of a home in the Greater Montreal Area is going to rise about 6% from 2020, putting it around $514,900. Condominium apartments are projected to rise around 3.75%.
The reason for this sharp price hike is the exact opposite of why prices in BC are dropping. There is a high demand for apartments and homes in Montreal, and there is little supply. Therefore, homeowners are allowed to ask for almost any price they want—and they will probably get it.
Not even an exodus of Canadians younger than 35 to less populated areas could stem the rise of housing prices in Montreal and Vancouver.
Be Sure to do Extensive Research
If you are looking to buy a home in 2021, then you are going to have to do more research than ever before. The housing market rose and fell throughout 2020, because many jobs were on a shaky foundation. It doesn’t help that forecasts for 2021 are varied. Some financial institutions are telling buyers to wait until 2022 for prices to stabilize, while others are calling 2021 the best time to buy a house.
For example, the Canada Mortgage and Housing Corporation (CMHC) said that there would be a massive recession, causing prices to decline between 19-29 % by the end of 2020. Meanwhile, another financial institution, TD Bank, said that prices in Toronto may very well rise by 8% going into 2021.
Get a real estate on your side and arm yourself with some knowledge. With a professional helping you, you can cut through the myths and white noise to find a property that covers all the bases.
Are You Ready to be a Homeowner in 2021?
In the end, buying a home is going to be a major financial decision, no matter when you decide to do it. Where you go and what you pay is going to differ depending on how in-demand the area is. That has not changed from 2020 or all the years before. What are your predictions for 2021? Do you think prices are going to rise or fall?