High demand in late 2020 should offset a lower number of buyers in the market
Pent-up demand for homes in top markets like Toronto, Vancouver, and Ottawa might compensate for lower purchasing power amid mounting job losses, RE/MAX said in a new study.
“Exceptionally low inventory in much of Canada may also contribute to upward price pressure as restrictions ease and demand increases further,” RE/MAX said.
In its analysis, RE/MAX predicted that the Canadian housing market will regain sustainability toward the end of 2020.
“As cities slowly begin the reopening process in the coming weeks, there is likely to be a transition from the uncertainty around the home-buying journey that was seen early on in the COVID-19 pandemic, to an increased comfort level among consumers and real estate agents when it comes to adopting new buying and selling processes,” RE/MAX said. This stability is likely moderate home sales prices, “with a possible price correction in the single digits.”
“The exceptions include regions such as Alberta and Newfoundland, which are still struggling to rebound from a host of shocks, the dive in resource revenues, and the potential for a second wave of COVID-19,” RE/MAX said.
Elton Ash, regional executive vice president at RE/MAX of Western Canada, is hopeful that the recovery will not take as long as certain quarters fear.
“Canada’s housing market was strong before COVID-19 hit, and despite the tragic impacts of the pandemic, we are optimistic that housing market could be restored much sooner than initially expected,” Ash said. “Canadian communities are resilient and people love their neighbourhoods, showing a collective commitment to bounce back.”