Canadian real estate brokerage Royal LePage expects home prices to rise 5.5% by 2021, based on unexpectedly strong growth this year, due to a shortage of real estate for sale and low-interest rates.
The forecast is at odds with others, including government-backed mortgage insurer Canadian Mortgage and Housing Corporation, which predicts price decline in 2021, and some of the country’s biggest banks, which foresee more muted growth.
According to the Canadian Real Estate Association, Canada’s average home price jumped more than 15% to its all-time high in October from a year earlier.
RBC Bank and Scotiabank said in their FY2020 annual report they expect home price growth of 0.6% and 0.4% over the next 12 months, citing economic instability caused by the pandemic, weakening the condominium market and limited affordability of housing.
Royal LePage hopes the move to larger homes will be reduced when “life returns to normal”, alleviating some of the pressure on the apartment market.
Demand for apartments is expected to be good in most of Canada’s largest cities, with the exception of Toronto, the company said.
Ottawa and Vancouver are expected to lead the country, with growth of 11.5% and 9%, respectively, while Calgary and Edmonton lagged behind with growth of 0.75% and 1.5%. Prices in Toronto are expected to increase by 5.75%.
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