Average home price in Vancouver BC – forecast 2021 and beyond
The state of the Vancouver Property market
“The median house cost of homes in Greater Vancouver is set to rise by 10 percent in 2021,” according to Alissa Thibault a CTV News Vancouver Journalist. These headlines and others are commonplace in the news today. Some are more positive, while others are filled with cautionary tales. Let’s look at the different forecasts to help you make your own conclusions to the real estate market in Vancouver BC.
Metro Vancouver has a population of nearly 2.5 million people and was named 35 among the top 100 cities around the world.
Metro Vancouver house prices have increased significantly over the last several months. It has forced prospective buyers of the market in multiple offers. However, the average price of Vancouver condos declined in the initial portion of 2021.
The trend didn’t last very long, since condos are typically the first step of the “property ladder.” If an apartment is the primary source of a home buyer’s down payment, the price of the house is likely to fall or the aggregate prices of condos must rise.
These and other issues stimulate our minds and imaginations. Maybe we can draw some of the wisdom and knowledge coming from these institutions. Beware, they have made incorrect forecasts in the past. As the old saying goes, the best real estate advice usually comes from between your right and left ears!
How much do you see Metro Vancouver home prices going?
There’s a lot of uncertainty regarding projections of 2021 and 2022. The forecasters we’ve interviewed have different expectations of:
What is the duration of the 3rd wave of COVID-19-related infections and the associated restrictions last?
Are Canadians able to be back in their offices and classrooms by the end of September or the month of December 2021?
- Can the federal government be successful in meeting its ambitious immigration goals of 400,000 new citizens per year in the event of a pandemic that has high levels of unemployment?
- Do mortgage interest rates start to increase? When?
- Do inventory levels stay at a low level compared to the previous years and especially when it comes to detached inventory supply of home?
- Could the next year shape into a sellers’ market?
There isn’t any consensus between economists. In the past, the underlying sentiment of markets and government stimulus have resulted in an increase in prices and record house purchases, even though the economic fundamentals have been shaky.
There are a variety of reasons sellers haven’t put their names on the market yet. They could wait until spring 2022 to sell, or contemplate selling in the summer of 2022 or perhaps don’t want to sell because of the huge quantities of government money printing.
Anyone who is contemplating selling their home can be encouraged because the value of homes is at record highest levels and they want to move forward and sell their homes during the pandemic.
Buyers who are planning to purchase an apartment should wait for a potential market correction. However, there’s no guarantee that the prices will fall in 2021 or even 2022.
The economic downturn, the high rate of unemployment, and eventual elimination of restrictions are the main sources of uncertainty regarding home prices. Certain experts predict a consumer trend that is similar to that of the 1920s roaring post-pandemic. Canadians who value freedom, newfound independence as well as nightlife and travel, will be less anxious to get home to shop.
Moody’s wrongly forecasted it was home prices across Canada would decline by 7 %
Certain reports were off the mark For instance, Moody’s 2021 house price index, which predicted a 6.7 percentage reduction for single-family homes and 6.5 percent decrease for condos. They claimed that there was a “dangerous excessive supply of new single family homes located in Calgary and Edmonton in addition to affordability concerns for Vancouver as well as Toronto.” But the reverse turned out to be true. According to Moody’s report, it was noted that the prices of homes in Canada could have fallen by as much as seven percent by 2021 as the rate of unemployment stifles the market for real estate that is booming. “The housing market will no longer be able to escape the poor condition of the labour market,” was the conclusion of the report.
In the end, everything was the case – at the very least in this particular year.
However, Moody’s prediction was that the real estate market is likely to slow down during the first quarter of 2021. And it’s not an isolated issue. Canada Mortgage and Housing Corp. economist Bob Dugan also predicted earlier this week that price acceleration for housing will decline in the future.
The report didn’t include inventory levels for condos or single-family house units for Vancouver BC for example.
By February 2021 some early signs began to emerge that the housing market was robust despite the pandemic. Despite the unemployment rate in B.C. at 13 percent and a predicted GDP decrease of 7.8 percent for this fiscal year, the benchmark value of a home has essentially stayed the same, ranging from a median price/average value at $1.02 million at the end of February 2021, to $1.028.
Prices for housing remain high even as the market cools Royal LePage reports
“Last summer of 2020 it was full on pedal to the metal,” said the expert declared. “Now with higher prices and buyer’s fatigue they’ve been taking a licking for a long time we are thinking we might see more of a typical summer, but slightly more intense than that.” According to the study that analyzes home prices in Canada’s 62 largest real property markets The median cost of a detached single-family home rose by 25 percent year-over year, during the second quarter, to around $1.6 million.
In the Royal LePage Market Survey Forecast The total cost of a house in Canada is expected to increase by 5.5 per cent over the course of the year to $746,100 by 2021 with the median cost of a detached two-storey home and condominium expected to rise 6 per cent and 2.5 percent to $890,100 and $522.700, respectively.
But, in Greater Vancouver, the aggregate cost of a house in 2021 is predicted to rise by nine percent per year, to $1,262,600.
The same time in the same time, the median value of a typical two-storey house is predicted to rise by ten percent to $1,671,700 and the median cost of a condo is predicted to rise 3.5 percent to $684,300.
Canadian home prices are expected to rise this year – however they will be slowed down – Reuters
Canadian property prices are set to increase rapidly in 2021, helped by low mortgage interest rates as well as huge demand, fueled by fiscal stimulus according to an Reuters survey of analysts which, said that risk was skewed towards the negative however.
Despite the economy being in the early stages of recovery, the Canadian housing market is continuing on fire in recent month-to-month activity in urban markets, with housing prices increasing dramatically to new highs in 2021. This is due to investor activity as well as a strong demand from buyers who are first-time homebuyers – making a resilient market.
Benchmark Prices for houses sector were expected to increase 15.0 percent in the average / median price for this year across the country which is the highest annual increase since the firm Reuters started conducting polls for 2021 more than 2 years or so ago. This is three times more than the 5 percent forecast for February for the average house price.
“Headlines will probably flag housing market declines in April, but don’t let them fool you…this market is still extremely strong across geography and segment, even if we’ve likely seen peak momentum it’s still a long way back from the moon,” stated Robert Kavcic, senior economist at BMO Capital Markets.
Prices for homes will continue increase over the long-term: CMHC advises Buyers
CMHC altered its forecast after an ominous forecast from the beginning of 2020 which was clearly incorrect on.
The Canadian Mortgage and Housing Corporation’s forecasts that in the coming three years anticipates increasing prices & possible tighter financial budgets for homeowners and cooling the market locally.
“In essence, the market will face the same sorts of affordability and housing shortage challenges that preexisted the shock of COVID-19,” said Braden Batch the senior analyst for Economics, CMHC.
The housing market has hit records in the past few months, and bidding wars becoming commonplace. However, with the gradual return of the normal pace in the near future the market for housing is predicted to decrease in the near future.
In spite of that the Metro Vancouver property market, which has many people feeling unhappy and shattered, it’s kept going and going. Many experts suggest it’s about time British Columbia take action to cool down the market for real estate in Metro Vancouver BC. With that there won’t be the number of bidding battles or sales, they claimed.
So the present high level for sales could likely to return home to long-term average sales levels.” According to the CMHC predicts that sales will decrease due to tighter budgets for buyers. “The sudden cut to interest rates for response to the pandemic worked its way through financial markets to affect mortgage rates very rapidly,” the outlook of the CMHC reads. “The adjustments to the price of homes due to this shift, however, is not a quick process.
No matter what, the cost of a home will increase to reflect the lower rates of mortgage.”
Summary
Metro Vancouver BC home values are growing across all types, however the rate of increase is slowing down.
The Canadian national housing agency has recognized Vancouver as a moderately risky market for residential properties but forecasts growth and the strength.
The mortgage rates are increasing from the lows of the past, and the unemployment rate is still high.
In the forecast of the Royal LePage Market Study, the total cost of a house in Canada is projected to increase 5.5 percent over the course of 2021.
Other articles from mtltimes.ca – totimes.ca – otttimes.ca
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