Year of uncertainty and change
Uncertainty and change have become common themes, as the world enters 2021. It’s been on a roller coaster of a ride, ever since the pandemic hit back in March. We’ve seen struggles and recoveries in various areas of the economy, the rise of the “new normal” in our everyday lives, as well as behavioural changes and some innovative shifts, including in the housing market. As Canada faces the second wave of the pandemic and its impact, we’ll most likely continue to encounter these types of transformations as we enter 2021.
One of the biggest contradictions in the housing market is consumers’ optimism, despite the disruption of the COVID-19 pandemic. According to a Leger survey with RE/MAX Canada, 52 percent of Canadians eye real estate as “one of the best investment options for 2021 and express confidence that the Canadian housing market will remain steady for the next year.”
This optimism of homebuyers in Canada has become the driving force of resilience in the housing market across the country.
Things to expect when you’re buying a home in 2021
When it comes to home buying, the common themes for the year ahead will be uncertainty, change, contradictions and most of all… resilience. While 2021 may still offer challenges, it’ll also be a time to be resilient, embrace opportunities and make smarter, long-term decisions.
As we enter into the new year, here’s a list of things to expect when buying a home.
1. Active re-location movements
People will continue being on the move in 2021. Amidst the pandemic, there’s been a stronger demand for spacious areas where people can live, work and play, given the greater prevalence of work-from-home arrangements that were established last year. While this perspective pushed most people away from major cities, such as Toronto and Montreal, due to affordability and space concerns, it also invited some people to enter urban areas.
Surprisingly, RE/MAX’s study revealed that 30 percent of Canadians prefer to live in urban, suburban and rural areas, equally. They still seek urban environment lifestyles that combine life, work and play. In terms of the Greater Toronto Area, studies have shown an increase in demand for low-rise homes in suburban locations. As for the suburban market, this was heavily impacted by out-of-town buyers. The survey also showed that this trend may continue on into 2021.
The younger generation has temporarily returned home, so that they can save money. But they’re expected to return to the cities in 2021, once vaccines become available in the market.
2. Abundance of condo apartments
Two distinct real estate markets in Metro Toronto are: (a) the housing market with rising prices and (b) the condo market with prices that aren’t increasing as compared to that of the housing market. Because of the surge in listings in the condo market and with lesser competition, more young professionals are expected to become more attracted to living in condominiums.
Condo floor plans have already begun to adapt to the new normal. Developers have started to offer larger spaces with 2-3 bedrooms. This trend is expected to bring down the prices of smaller condo units.
3. House prices will climb higher
Forecasts say that the unmet demand from the second half of 2020 in the home buying market will continue to drive prices up in the coming year.
Single family homes will remain in demand, as more people look for a permanent home with more workable spaces and greener areas. Across the country, many hopeful home buyers weren’t able to find the home they’re looking for, because of limited listings. As Canada faces the second wave of the pandemic, more and more people will continue to look for a new home that’ll help them adapt better to the new normal. However, if the inventory of homes won’t be able to meet this demand, home prices will continue to rise.
Policy-makers have started making efforts to mitigate the situation, by ensuring home buyers that interest rates will remain low. This move is expected to support mortgage borrowing in 2021.
Get ready for 2021 with the help of a professional
In today’s world, change is inevitable. The emergence of COVID-19 in 2020 is a drastic shock that affected the entire world. With people still experiencing the aftermath of the coronavirus in the year to come.
The real estate market has been one of the industries heavily affected by the pandemic. Although there’s been a lot of innovations and efforts to help us adapt to the new normal, the ever-changing situations and trends will remain challenging for consumers, including home buyers.
Plan ahead and seek a professional to help you find your dream home, especially since the landscape is changing and there are many new challenges to face. Daisy Raouph specializes in mortgage financing solutions and financial services. Contact us to help you evaluate your financial readiness. Leverage a trusted advisor today to achieve your home goals in 2021!