While 2020 has been an exception of a year, 2021 has started with a ray of hope with Covid vaccination drive underway across the world. The Canadian housing market has been on an upward curve after the hiatus and the predictions for the New Year are upbeat. A lot of us are wondering if the all-time low mortgage rates will continue or if rental demand will go up? Here's what the experts have to say!
Housing demand will be upbeat in 18-hour cities
Remote working across sectors has led to an increase in 'space prioritization' by people who were earlier on the hunt for homes closer to work. Not only is the demand for single-family homes going up, they are also looking at homes outside the city; homes which are spacious as well as affordable. It seems such people will prefer to stay in 18-hour cities, a term gaining traction in the real estate market, and defined by cities which, though mid-sized, but provide great facilities, and lower living costs et al. And in cities which experience high demand, the rates are bound to go up as well.
Downtown condo prices will fall and then become stable
Due to the lockdown and the practice of social distancing along with remote work, closure of educational institutions, and large drops in tourism and immigration, condo-dense markets saw a low demand and hence rise in rental vacancies as well as listings. If you want to rent a great condo at greater prices now is the time to make your move and seal the deal. However, if life returns to near normal post vaccination, the demand will bounce back and rental vacancies will begin declining again.
Mortgage rate to remain viable
The overnight lending rate has been kept at 0.25% for almost the entire year of 2020 by Bank of Canada. This has been done to absorb the impact of slowdown of the economy. We feel the same or similar overnight lending rate will continue for most of 2021 too. Mortgage rates may move up slightly. Fixed rates are bound to slightly go up as well but that will depend on the vaccination and its overall impact. These rates will further bear an impact on real estate prices as well.
Canadian Prairies housing poised to do well
Even though the Prairies have borne a great brunt of the pandemic, the competition in the housing market there is on. It is expected to further rise post the vaccination drive and if the world economy itself starts showing positive signs. The positive movement in the Prairies housing segment, however, will show better signs towards the latter half of the year.
Mortgage regulations to be far and few in 2021
As the regulators and the government remain keenly focussed on revival of the economy post the pandemic, any new rules and laws causing a hurdle or inconvenience to buyers looking to get a mortgage will wait. The government will be extremely cautious in doing so, so as to not hurt the market sentiment.