Pent up demand and low interest rates driving Canada's home prices higher: Royal LePage CEO
The most expensive housing market in Canada is ready to surge after three years of stagnation.
In Greater Vancouver, where the average home costs just over $1 million, prices will rise nine per cent in 2021, according to a forecast from brokerage Royal LePage.
That’s a sharp rebound after three years when benchmark Vancouver home prices gained just 0.5 per cent as local government efforts to rein in housing costs took hold, data from the Canadian Real Estate Association show.
Prices in Vancouver will be driven up in 2021 as first-time buyers try to get into the market and demand for housing outstrips supply, according to Phil Soper, president of Royal LePage.
“We’re dealing with not just a few weeks of pent-up demand in Vancouver, we’re dealing with three years of pent-up demand,” he said.
The COVID-19 pandemic has fueled a rally in Canadian home prices, as low interest rates and demand for more space drive a buying frenzy. A tight supply of available properties has helped drive up prices. That trend is expected to continue next year.
Nationally, homes prices will jump 5.5 per cent next year, with most of Canada’s largest cities out pacing that rate of growth, according to Royal LePage.