{"id":686,"date":"2019-12-31T02:15:13","date_gmt":"2019-12-31T02:15:13","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=686"},"modified":"2023-09-26T21:21:34","modified_gmt":"2023-09-26T21:21:34","slug":"better-forecast-prediction-for-canadian-real-estate-in-2020","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/better-forecast-prediction-for-canadian-real-estate-in-2020\/","title":{"rendered":"Better Forecast Prediction for Canadian Real Estate in 2020"},"content":{"rendered":"
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There\u2019s just a day left in the year 2019 and it seems like every year at this time people of all different professional stripes \u2013 real estate agents in Canada included \u2013 find themselves saying something along the lines of it seems like it was January 1 just a few months ago. They say time flies by even faster as you get older, and considering that\u2019s something we\u2019re all doing we imagine that many of you are equally surprised that 2020 is just around the corner. The real estate market in Canada is just like any other one in the world in that it can and will continue to fluctuate. There\u2019s been portions of this past year where the market has cooled off quite considerably. While a \u2018flat\u2019 housing market is going to be preferable to one that\u2019s in decline, what they do is they put a chill on the market as homeowners who would list their home otherwise decide to postpone until it\u2019s more likely they\u2019ll get a better price for theirs.<\/p>\r\n\r\n\r\n\r\n

Here at Real Estate Leads, we\u2019re happy to make our advantage available to real estate agents who may find the lack of homes going onto the market to be a real risk to the viability of their career choice. Our online real estate lead generation service for Canada is one of the best tips for new real estate agents as it puts the power of Internet marketing to work in generating real client prospects based on their responses to voluntary surveys online.<\/p>\r\n\r\n\r\n\r\n

There\u2019s more to it than that, but all most realtors will need to know is that it works \u2013 and it does!<\/p>\r\n\r\n\r\n\r\n

But back to our topic here, as one year comes to a close and the next is set to begin it\u2019s logical to take a look forward at what industry experts forecast for the year to come. After a disappointing 2018, when housing prices and sales dropped overall, 2019 was something of a resilient year for the Canadian housing market. Sales numbers did stabilize and resume an upward climb, but the strength of prices often weren\u2019t what interested parties had hoped they would be.<\/p>\r\n\r\n\r\n\r\n

2020 Recovery Predicted<\/strong><\/h3>\r\n\r\n\r\n\r\n

Overall, it seems the news looks to be good. A review of the forecasts by leading real estate experts in Canada is pointing to a recovery in 2020. The Canadian Real Estate Association (CREA) has an approximate number of 530,000 for the volume of national home sales it expects to see for 2020. If realized, that will be an 8.9% increase over the total expected for 2019. The CREA is also predicting that the national average price will reach $531,000 in 2020, and that\u2019s a 6.2% increase there.<\/p>\r\n\r\n\r\n\r\n

It\u2019s always best go garner a few educated opinions, however. Royal LePage is predicting a 3.2% year-over-year increase in housing prices next year. RE\/MAX has their own prediction, a little more optimistic one that foresees a 3.7% increase. Though their benchmark prices are different from CREA, they share a belief that the market is moving in the same direction.<\/p>\r\n\r\n\r\n\r\n

Economists tend to have a fairly accurate take on these matters as well, and a poll of 18 of them is seeing foreseeable gains too. This group is predicting that Canadian housing prices will rise by 3% in 2020, and 2.9% in 2021.<\/p>\r\n\r\n\r\n\r\n

Increasing Immigration will Continue to Bolster Housing Demand<\/strong><\/h3>\r\n\r\n\r\n\r\n

Continued strong immigration numbers are going to factor into the dynamics of the housing market in Canada in a big way, with these numbers most notably maintain a sustained demand for housing in Canada\u2019s most populous housing markets. An October 2019 Royal LePage survey believes that newcomers to Canada are expected to purchase one in every five homes on the market over the next five years.<\/p>\r\n\r\n\r\n\r\n

Concurrently, the CREA is also making the very relevant note that the Bank of Canada is unlikely to raise interest rates in 2020. Staying pat with this will drive demand for mortgage financing from prospective homebuyers. If there\u2019s one clear-cut positive to take from all of these forecasts, this is it.<\/p>\r\n\r\n\r\n\r\n

It\u2019s true that most market watchers are optimistic about housing, but causes for concern are definitely visible too. Look no further that not everyone expects a three-plus % jump in prices. Many industry and economic insiders are saying something more around 1 percent is a lot more realistic.<\/p>\r\n\r\n\r\n\r\n

One more concern is that listings are not keeping pace with sales. When sales are increasing, then a matching increase in new listings is necessary to restrict inflationary pressures. The fact of the matter is there\u2019s nothing to indicate that will occur to the extent it needs to over the coming year.<\/p>\r\n\r\n\r\n\r\n

Adding growth in mortgage credit to this tightened supply looks like it will be a very pivotal factor. It\u2019s well understood that a drop in mortgage rates has boosted the markets artificially over recent years. Strong underlying demand, tight supply and low-interest rates are the same ingredients that were present in some housing markets three years ago, and that\u2019s exactly what we have here again.<\/p>\r\n\r\n\r\n\r\n

Mortgage Stress Tests Continue to Factor In<\/strong><\/h3>\r\n\r\n\r\n\r\n

The regulatory measure that\u2019s been the single biggest factor in addressing housing price inflation is the stress test, which was expanded in January 2018 to encompass uninsured mortgages and made it necessary for borrowers to qualify at a higher rate than the negotiated rate, with the idea being it would insulate the lender against potential delinquencies should future rate hikes occur.<\/p>\r\n\r\n\r\n\r\n

Prime Minister Justin Trudeau is having finance minister Bill Morneau review mortgage stress test regulations and potentially make them more dynamic, but how and if \/ when that will actually happen remains to be seen. Taking regional considerations into account when making any such a sort of review \/ amendment process is something that has to happen.<\/p>\r\n\r\n\r\n\r\n

Relatively Positive Outlook<\/strong><\/h3>\r\n\r\n\r\n\r\n

All in all, a vibrant labour market along with a vigorous demand for housing and low interest rates look to be capable of creating an environment that will be favourable for housing in 2020. The FTHBIA (First Time Home Buyer\u2019s Income Assistance) initiative to help new homebuyers with shared equity mortgages and a possible review of the stress test are also positive signs.<\/p>\r\n\r\n\r\n\r\n

That\u2019s it for now, and we wish you all a Happy New Year.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

  There\u2019s just a day left in the year 2019 and it seems like every year at this time people of all different professional stripes \u2013 real estate agents in Canada included \u2013 find themselves saying something along the lines of it seems like it was January 1 just a few months ago. They say […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-686","post","type-post","status-publish","format-standard","hentry","category-general-topics"],"yoast_head":"\nBetter Forecast Prediction for Canadian Real Estate in 2020 - Real Estate Leads Blog<\/title>\n<meta name=\"description\" content=\"Better Forecast Prediction for Canadian Real Estate in 2020 - Real Estate Leads Blog\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realestateleads.ca\/blog\/better-forecast-prediction-for-canadian-real-estate-in-2020\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Better Forecast Prediction for Canadian Real Estate in 2020 - 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