According to the Royal LePage House Price Survey and Forecast, powered by its sister company RPS Real Property Solutions’ Data and Analytics, the aggregate price of a home in Canada increased 6.8% year-over-year to $673,072, in Q2 2020. Once provinces allowed regular real estate activity to resume, demand surged in many markets and inventory levels, already constrained pre-pandemic, have failed to keep pace.
Royal LePage highlights Ontario and Quebec where the demand for housing outpaced the growth in supply, especially in the early weeks post-lockdown. The surge in the number of first-time buyers was noticeable, as these housing consumers soaked up supply without contributing to the supply.
Phil Soper, president and CEO of Royal LePage said, “We are now seeing sellers return to the market in key supply-constrained regions in numbers sufficient to meet demand. Home buyers should enjoy more reasonable conditions with stable prices and improved selection in the second half of the year."
In addition, there has been a trend towards smaller communities. As the reality of extended and potentially permanent work-from-home employment sunk in, people pondered both the location and size of their homes. Larger homes in smaller communities have become more fashionable and people are looking for single-family homes to avoid co-living in big condominiums buildings. As competition for these properties heats up, bidding wars are becoming more common in what were previously quieter cities and towns.
Here are how the various property styles faired according to Royal LePage’s National House Price Composite, which represents the median prices for 64 of Canada’s largest real estate markets:
- Standard two-storey home rose 8.0% year-over-year to $794,392
- Bungalow increased 3.9% to $550,289
- Condominium increased 5.3% year-over-year to $503,983
Royal LePage expects a lengthy recovery and has revised its –previous forecast up slightly. It now expects that the national aggregate price at the end of 2020 will be up 2.3% to $663,000 year-over-year.
As home sellers return to the market, inventory levels are expected to rise, relieving the acute upward pressure on home prices that characterized the supply-constrained second quarter of 2020. Uncertainty clouds Canada's real estate outlook as a lengthy recovery for the Canadian and world economies is expected. The negative impact on home prices should be muted by the balanced nature of Canadian housing, as chronic housing supply shortages offset dampened medium-term demand.
Greater Toronto Area (GTA):
- Pent-up demand coupled with a lack of supply in the Greater Toronto Area (GTA) resulted in significant price appreciation in the second quarter.
- The aggregate price of a home in the GTA increased 10.0% year-over-year to $899,001 in the second quarter of 2020, with a standard two-storey home increasing by 10.7% to $1,050,323, a bungalow by 6.4% to $852,260 and condominiums by 9.3% to $599,235
- Royal LePage is forecasting that the aggregate price of a home in the GTA will increase 4.0%to $882,000 in the fourth quarter of 2020 compared to the same quarter last year
- Prior to the market disruption caused by the pandemic, the GTA was on track for double-digit price growth in 2020 and now with listings not keeping pace and buyer competition high, Royal LePage is again seeing double-digit price appreciation in the region
Greater Montreal Area (GMA)
- With the resumption of real estate brokerage activities on May 11, after being shut down for more than a month, all property categories in the region saw significant price appreciation, and the jump in appreciation was largely due to substantial pent-up demand from buyers who had to put their activity on hold during the shutdown
- The GMA aggregate home price rose 7.7% year-over-year to $449,996, in the second quarter of 2020, with a standard two-storey home increasing by 8.7% to $566,874, bungalows by 7.2% to $351,015 and condominiums by 5.6% to $351,889
- Per Dominic St-Pierre, vice president and general manager, Royal LePage for the Quebec region. "In my 18-year career, I have never seen such a tight ratio between the number of active listings and sales, reaching a new high in this seller's market, despite the fact that the Montreal region has been hit the hardest by the pandemic and shutdown in Canada.”
- As a result, Royal LePage is forecasting the aggregate price of a home in the GMA will increase 3.5% to $452,000 in the fourth quarter of 2020 compared to the same quarter last year.
Greater Vancouver Area (GVA)
- The aggregate price of a home in Greater Vancouver increased 1.9% year-over-year to $1,109,069 in the second quarter of 2020, with standard two-storey homes increasing by 3.7% to $1,455,027 and the price of condominiums remaining relatively flat, decreasing 0.4% to $638,242 and bungalows decreasing1.1% to $1,189,692
- Per Royal LePage, the GVA real estate market is continuing its recovery that began in 2019. While the pandemic caused a significant disruption in early spring sales, continued low inventory has maintained prices. Further, stronger price appreciation for two-storey homes compared to condominiums reflects buyers' preference for larger properties and less shared areas, a trend that has evolved as a result of the pandemic
- Royal LePage is forecasting that the aggregate price of a home in GVA will increase modestly by 0.5% to $1,087,000 in the fourth quarter of 2020 compared to the same quarter last year
- The aggregate price of a home in Calgary remained relatively flat year-over-year, decreasing 0.2% to $465,273 in the second quarter of 2020
- By housing type, the median price of a standard two-storey home increased 1.1% to $509,918, bungalows remained relatively flat, decreasing by 0.1% to $488,838 and due to high inventory in the condominium segment, the median price of a condominium decreased 9.7% to $252,308
- Says Royal LePage, while sales are down year-to-date, activity in June was comparable with last year. Buyers have returned to the market more quickly than sellers; inventory has not kept pace. With the exception of the condominium market, Calgary real estate continues to shift towards a balanced market. Also, first-time home buyers are driving sales in the region, which has increased competition and depleted inventory for listings within the $300,000 to $500,000 price range
- Royal LePage forecasts the aggregate price of a home in Calgary will decrease 1.5% to $463,000 in the fourth quarter of 2020 compared to the same quarter last year.
About the Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 64 of the nation’s largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.
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