Where Do Experts Say the Housing Market Is Heading? - May 25, 2021
Ian Walterhouse
Thursday, May 27, 2021
Where Do Experts Say the Housing Market Is Heading?
As we enter the middle of 2021, many are wondering if we’ll see big changes in the housing market during the second half of this year. Here’s a look at what some experts have to say about key factors that will drive the industry and the economy forward in the months to come.
Total housing starts will gradually increase due to higher pre-construction sales. This is seen primarily in condominium apartments that have yet to break ground.
Resale home sales growth will remain strong in 2021 before slowing down in 2022. The rapid pace of home buying is expected to ease as homebuyers adjust to rising mortgage rates and record price growth.
Average price growth will moderate as the pandemic recedes and individuals move back into downtown areas. This will tilt the composition of sales back towards relatively lower priced condominium apartments. Rental demand is expected to recover as borders reopen and higher immigration targets are met.
Based on the most current available statistics (April 2021) in the Greater Toronto Area, the Toronto Regional Real Estate Board (TRREB) reports that,
“While sales remained very strong last month, many REALTORS® noted a marked slowing in both the number of transactions and the number of new listings. It makes sense that we had a pullback in market activity compared to March. We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth. We may be starting to exhaust the pool of potential buyers within the existing GTA population. Over the long term, sustained growth in sales requires sustained growth in population,” said TRREB President Lisa Patel.
In addition, TRREB’s Chief Market Analyst Jason Mercer says that:
“Despite a modest slowing in market activity in April compared to March, selling prices for all major home types remained very high. Low borrowing costs during COVID-19 clearly had an impact on the demand for and price of ownership housing. While the pace of price growth could moderate in the coming months, home prices will likely continue on the upward trend. Renewed population growth over the next year coupled with a persistent lack of new inventory will underpin home price appreciation.”
The Ontario Real Estate Association shared the following thoughts in a recent release,
“Despite a year of upheaval and unpredictability due to the COVID-19 pandemic, home buyer intentions have returned to being as strong as they were pre-pandemic. Home buyer preferences from one year ago, before the pandemic, indicated strong interest in detached homes and properties with more space. After a year of lockdowns and working-from-home, that trend has only accelerated due to factors like increased savings (19%), a desire for more space (19%) and a sense of urgency to buy now given recent market growth (23%).”
Bottom Line
Experts are optimistic about the second half of the year. Let’s connect today to talk more about the conditions in our local market.
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