The Canadian Housing Market Trends: 2020 Forecasts

The Canadian Housing Market Trends: 2020 Forecasts

BY: DIGITAL MEDIA MARKETING | MB Enterprises

Making money in the Real Estate not only requires immense amount of market trends analysis but also requires focus of the variable markets.

A huge part of the residential property income comes from the ‘rented properties’. The rental income in Canada and the prices of buying a home via mortgages have fluctuated since 2016.

The reasons can vary due to the size of the huge country i.e. Canada, however, making useful analysis of the trends is a vital element while making investments in the property sector.

WHAT ARE THE HOUSING MARKET TRENDS?

The housing market trends are related to the rise and fall in the real estate and property markets. These ‘Trends’ matter mostly in big countries where land is easily available but the prices of properties can vary according to the climatic conditions, according to the provinces, and according to the real estate behaviors in the last few years.

As Canada is a huge country with low population density, these stats also vary according to the provinces and the intense climatic hazards. In the ‘Housing market’ trends, ‘country-risk’ is one of the foremost risks and these depend according to the political conditions of the country. Other conditions that relates to ‘country-risk’ are terrorist activities or attacks, war conditions & political instability. Climatic hazards in form of an earthquake, storms or intense cold conditions are also few examples.

THE ROLE OF ‘INFLATION’ IN REAL ESTATE:

Inflation in the real estate means the prices of property today shall be different from that 10 years later. As an example we can have a look at this case scenario a bit closer. A piece of land worth $100,000 in the year 1970, even if it is undeveloped and not cared for it will be worth many times more than what it was worth in 1970. Therefore, the value of the property will automatically rise with time in most cases and this rise variance is according to the ‘appreciation value’ for the land.

CANADIAN HOME SALES WILL BE ON A HIGH FOR THE NEXT TWO YEARS:

According to the CMHC’s sales forecasts figures that are in most cases accurate the home sales have fluctuated since last 4 years i.e. 2016, 2017, 2018 and 2019. It was on a peak in 2016 than came down in 2017 and kept falling in 2018 and stayed the same in 2019. However, there is a huge forecast for 2020 and 2021 that the home sales in Canada especially in Ontario and British Columbia will increase. This is mainly because of a strong demographic-driven demand for the housing sector.

REASONS FOR STABILITY IN NEW HOME CONSTRUCTION IN CANADA:

There will be stability in 2020 in the new home construction in Canada, and that is due to the demographic demands increasing in most provinces. In 2017 it was on its high i.e. most constructions of new homes in Canada happened in 2017 according to stats. What’s expected in 2020 and 2021 will be the same as of 2019 figures for home construction and that’s in line with the historical average for annual home construction.

There are many reasons why the stability in construction matters, the main reason is economic stability and over all property prices. The economic outlook for Canada has stayed positive over the years and this is mainly because builders feel good about picking up the pace in home construction. One of the key factors of stability in home construction is a stable labor market and labor laws. Canada is a country that gives labor rights to its construction workers and labors with insurance that covers life insurance, and injury at work insurance.

THE IMPORTANCE OF LABOR LAWS IN CANADA:

Labor and construction laws in Canada holds huge importance and are a big reason for its economic stability, hence automatically affecting the stability factors. Labor laws in the construction industry are designed for the sustainability of Canadian citizens and the country itself. There is huge infrastructure in Canada especially in cities like Toronto, Vancouver, Calgary, Ottawa, and Montreal. These are some of the biggest cities in Canada with huge investments in property, which includes both private and commercial.

AFTER DECLINES OF 2019, A RISE IN HOME PRICES:

Similar to the sales there has been huge fluctuations in the home prices since the last 2 years. Not like the home sales the organization CMHC believes that it will be at strength in the provinces of Ontario and Quebec, and that will lead to growth in the year 2020.

However, by 2021, Quebec will be down on the third place and the British Columbia markets will be in the big leagues. These three provinces are the center of attraction for CMHC with little gains that will be expected in other regions.