Less than a year ago with the COVID-19 pandemic gripping Canada, the Canadian Mortgage Housing Corporation (CMHC) predicted dire consequences for home prices. Housing prices could plummet, the now former president and CMHC CEO said between 9-18%. History and data have proved that prediction to be incorrect. In fact, in just less than a year Canada’s housing market continues to defy that initial forecast, with home prices already having jumped more than 30% to date, and suburbs, smaller cities, and rural areas all helping to lead the way. In 2020, total sales in Canada outpaced total new listings as the existing-home market recovered, supporting overall price growth. At the same time, sales growth has been more robust for relatively more expensive single-detached units, as households sought larger homes as they adapted to the work-from-home phenomenon, further supporting overall average price gains. CMHC is currently predicting that national home prices will continue on their upward trajectory and indicates that the average selling price of a home could increase 14% to $649,400 in 2021, from $567,699 last year. The national housing agency also forecasts property resales could climb as much as 9% to 602,300 units over the same period. The Canadian Real Estate Association (CREA) has an even more bullish sentiment, saying that it expects nearly 702,000 properties to change hands through Canadian MLS systems in 2021, up from the 551,262 recorded in 2020, while sales for 2022 may reach 614,000. The association also said it expects the average Canadian home price to rise by 16.5% annually to just over $665,000 in 2021 and $679,341 in 2022 — notably higher than the 12.9% increase recorded in 2020.
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