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Low inventory, unmet demand: Forecast suggests Greater Vancouver home prices will go up in 2021

Last Updated Dec 14, 2020 at 7:15 am PST

A real estate sign is pictured in Vancouver, B.C., Tuesday, June, 12, 2018. THE CANADIAN PRESS Jonathan Hayward
Summary

Royal LePage finds high demand and low inventory will push home prices higher into the new year

Royal LePage aggregate home price in Canada expected to rise 5.5 per cent year-over-year to $746,100 in 2021

VANCOUVER (NEWS 1130) – Vancouver’s housing market continues to show its resiliency, but that’s not exactly good news for homebuyers.

The Market Survey Forecast from Royal LePage has found the supply of homes available for sale failed to keep pace — driving home prices higher and pushing unmet buyer demand into the new year.

Vancouver, which the real estate firm points out is Canada’s priciest city, is expected to see a nine per cent year-over-year rise in the aggregate price of a home as demand surges.

CEO Phil Soper says nationwide there has been a clear shift towards larger properties and single-family dwellings during the COVID-19 pandemic.

“The leading indicators we analyze are pointing to a market that favours property sellers in the all-important spring of 2021,” said Soper. “Across the country, a large number of hopeful buyers intent on improving their housing situation were not able to find the home they were looking for this year, as the inventory of properties for sale came nowhere near to meeting surging demand. With policy makers all but promising record low, industry supportive interest rates to continue, we do not see this imbalance improving in the new year. The upward pressure on home prices will continue.”

In the Greater Vancouver area, the median price of a standard two-storey home is expected to rise 10 per cent to $1.67 million in the new year.

And while the condo market is not as strained as the single-family detached sector, demand remains strong.

“I am confident we will continue to see prices rise next year. Vancouver has proven to be a rather resilient market, with high demand and quite low inventory,” said Randy Ryalls, managing broker, Royal LePage Sterling Realty. “In March, we couldn’t have imagined this is where we’d be today, but despite public health concerns, consumer confidence remains high. With very attractive mortgage rates and the promise of a vaccine on the horizon, demand is likely to remain strong.”

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Ryalls noted that the current market conditions create a tough situation for buyers, who are oftentimes competing for properties; something he expects is likely to continue through 2021.

Canada-wide, Royal LePage says its aggregate home price in Canada is expected to rise 5.5 per cent year-over-year to $746,100 in 2021.

The median price of a two-storey detached house nationally is expected to increase 6.0 per cent to $890,100, while the median condominium price is forecasted to rise 2.25 per cent to 522,700.