Canada

The Canadian Real Estate Industry Has Forecast Face Ripping Price Gains Next Year

Canadian real estate is expected to be slow for the rest of this year, but it won’t last very long. The Canadian Real Estate Association (CREA) shared their 2021 forecast. In the forecast for this year, they see minimal movement from the current average sale price. Next year they see huge gains returning, especially in Ontario. The province is forecast to see nearly double-digit growth in home prices next year.

Canadian Real Estate Prices Forecast To Grow Minimally In 2021

The Canadian real estate industry doesn’t see much more action for the rest of the year, which still has a quarter to go. The national average sale price is forecast to reach $680,025 in 2021. It would be an increase of just 0.03% ($170) from the year to date (YTD) average sale price as of August. In other words, they see virtually flat movement for the rest of the year, unlike the boom last year. 

Canadian Real Estate Forecast

The forecast average sale price for 2021 and 2022.

Source: CREA; Better Dwelling.

In Ontario, gains are expected to be a little higher — but most of the year’s movement is already in. CREA made an upward revision, and has now forecast an average sale price of $860,443 for 2021. This is 0.31% ($2,688) higher than the YTD average in August, so not a huge movement. Especially when  compared to how the market was moving earlier this year.  

Over in BC, the gains are expected to be half the size of Ontario. They have forecast an average sale price of $912,284 for 2021. Compared to the YTD average in August, this is 0.15% ($1,321) higher. Not much of a climb, but still higher than the forecast for the average at the national level. 

Canadian Real Estate Prices Forecast To Boom Next Year, Especially In Ontario

The top for the year might be in, but CREA is expecting astronomical growth for home prices next year. The forecast average sale price at the national level reached $718,206 for 2022. On top of the 2021 forecast above, that would mean another 5.6% ($38,181) increase. It’s less than half of the YTD gains compared to last year, but still a decent amount of growth for prices. 

Canadian Real Estate Forecast Change

The annual percent change to the forecast average sale price for 2021 and 2022.

Source: CREA; Better Dwelling.

Ontario real estate is expected to way outperform the national average. The average sale price is expected to rise to $942,325 for 2022. This is up 9.5% ($81,882) from the 2021 forecast, which is less than half of the gains forecast this year. Though the gain is still so large, most buyers might not appreciate the “slowing” growth. 

BC real estate is expected to underperform the national average next year, which is a bit of a shock tbh. The forecast average sale price is $947,434 for 2022. The average is 3.9% ($35,150) higher than the forecast for this year’s total. Just a little above the forecast rate of inflation — which is great, but not the boom in Ontario.

Not a lot of price growth expected for the rest of the year, but we’ve already seen healthy gains YTD. Next year CREA is seeing much slower growth, but even half the rate of this year is huge. Ontario is a big outlier, where prices are seen climbing more than the median gross household income.

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28 Comments

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  • V 4 weeks ago

    CREA is wrong. Things can’t continue like this. There will be lots of house completions by builders. Lots of supply coming!

  • Cto 4 weeks ago

    How does an economy work when cost of shelter demands higher and higher wages in a country were jobs can be offshored.
    Who in their right mind would want to start a busines in a country like that???
    Better to live, work, or run a business where cost of living is a 3rd of canada.
    In a global economy, wages have to drop in canada for us to be competitive.

    • Qwerty 4 weeks ago

      Houses are only for talented people in Canada

  • questions guy 4 weeks ago

    did they say why, or ‘just because’?

    • Brian 4 weeks ago

      Do they really to say why? Give you a mini sample, how about stop all city clerks from processing “building permit”? Don’t you think house price will double again? Certainly this is extreme sample but have you not seen similar things happened in much more subtle way?

      • question guy 4 weeks ago

        no.

        your argument is ‘just because’.

        that’s not an argument

        • Man 4 weeks ago

          Rubbish if we put economics.

          Price will fall if government increases capital gain from 50 to 75%.
          With minority government support of NDP would be required and NDP will ensure Capital gain tax is increased plus futher possibility of taxing wealthy people higher.

          Also next year interest rates will also start increasing.

  • Nick 4 weeks ago

    Because the Canadian Dollars’ value is dropping rapidly 😆

    If only one – or two assets – rise, then it is a bubble. if everything rise, then it is a currency devaluation.

    • Rick James 4 weeks ago

      You do realize that CAD is still above where it’s been relative to USD for over the last 5 years right?

  • Garn 4 weeks ago

    Unsustainable.

  • Kate 4 weeks ago

    What they are smoking there? Please do not post any thing without arguments.

    • Paul 4 weeks ago

      I think you mean data.

      • Vjkenny 4 weeks ago

        She is probably from arts, they dont use data. They use “argument”.

  • D 4 weeks ago

    They’re playing goose. None of these suckers know what’s going on or have any real control. A small group of a few devilishly evil men/possible a woman or two decide when the trough is empty and when the pigs have had enough.

  • Goro Moldova 4 weeks ago

    This is a HUGE win for canada! Go canada go!! #cantbestopped #wontbestopped

  • Pete 4 weeks ago

    Wtf, like really?!?!? Who’s out there protecting the little guy? This is absolutely ridiculous

  • M.Bury 4 weeks ago

    The real estate industry has a clever little scam going…they’ve managed to convince people to buy first, sell later. It assures there are always more buyers than sellers.

    • Yvonne 3 weeks ago

      Realtors are advising homeowners to buy first otherwise they could potentially be homeless with hoards of buyers on every property creating multiple offers it is tough to buy right now. Being out of the market for two long could be costly to homeowners. It is good advice

  • Lim 4 weeks ago

    This forecast is from CREA, a group of real estate agents. With slower market, they want to generate more panic and lead buyers to jump in before this “astronomical increase next year.” It’s baseless and biased.

  • Cto 4 weeks ago

    How on earth can canada remain globally competitive if the cost of shelter is triple everywhere else!!!!
    There’s a REAL economy somewhere in this land but it is quickly being stomped out for housing!!!
    This needs to be stopped…

  • Sean Kelly 4 weeks ago

    So prices are going up even though real estate brokers, agents and mortgage brokers say it’s a bubble and is going to burst next year… how can people afford the rising cost of real estate when there isn’t a direct correlation to people making more money… who is buying??

  • Joe 4 weeks ago

    What else would the REAL ESTATE people say. Always scaring people ..Prices are going up, hurry up , Buy Buy so that I can make more money. My cannot afford to buy anything and other mortgage to the gills people eat cat food
    I I am wrong let me know

    • Van YIMBY 4 weeks ago

      The real estate industry also under called the run over the summer. I have yet to see a negative forecast for next year.

  • Realestate 4 weeks ago

    Does canada have anythi g else except real estate. Same crap for 15 yrs now, its gettin old and worn out.

  • Grégoire 4 weeks ago

    Trudeau will make purchasing easier, expect more demand and price hikes. They will crank this market until it collapse on itself, which might never happen if you let 400K/year new immigrant in canada + baby boomers owning multiple homes not selling (no one wants to sell on an increasing market).

  • Dennis_K 4 weeks ago

    Yet again, a ‘sales organization’ (i.e. CREA) making price increase projections, but for no useful purpose except their own. If they had any concern for the housing affordability crisis, why would they make such projections? I guess it serves their interest – if the projection is wrong, who cares, nothing to be accountable for, and if the projection is correct, well, they make more money. That’s the benefit of releasing such projections: you get to instil yet more paranoia into the minds of potential buyers, driving them to enter the market sooner than they are ready (or need to), as well as instigate bidding wars. No social benefit here – just more profit.

    Also begs the question: how can CREA predict such price increases, and more specifically, quantify them, in a system where closed-bidding is supposed to be happening? Do they actually have a defensible basis for such projections? Or could it be, that THEY’RE the ones who are (clandestinely) instigating the increases, since it serves their interest?

    • Kaliucla 4 weeks ago

      Nah you got it spot on initially. Their forecasts aren’t worth the paper they’re written on.

      The determinate factor in the price of houses in the current market come down to availability + interest rates; with emphasis on the interest rates.

      I ran a costing analysis the other day that I’d like to share with the class:
      $900,000.00 house at the lowest interest rate I can find (1.89% 5yr fixed) and minimum down payment ($65,000.00) leads to a mortgage of $3631/month.

      At 3.25% interest to achieve a $3635/month mortgage payment you would be looking at a $750,000.00 house with $50,000.00 down (minimum required).

      By my calculation, a 1.36% interest hike on the mortgage translates into a -$150,000.00 purchasing allowance for an individual to blindly bid with.

      Open to any feedback on that analysis.

  • Disillusioned Canadian 3 weeks ago

    I’ve completely given up on trying to buy Canadian real estate. Forecasts about continual price gains in real estate are about as meaningful to me as Forecasts for the price of diamonds. This has just become the domain of the rich and overlevered.

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