Nearly Half of Canadians aged 25 to 35 own their home.

 

Royal LePage Survey: Nearly half of Canadians aged 25 to 35 own their home; one quarter of these homeowners have purchased a property since the onset of the COVID-19 pandemic

52% say remote work has increased likelihood of moving further from employer 

Highlights:

• 68% of non-homeowners aged 25 to 35 intend to purchase a home within five years
• 72% of cohort feels confident in their short-term financial outlook
• 40% of cohort saw their savings grow since mid-March
• Royal LePage survey includes national, regional and city-level insights

 TORONTO, February 25, 2021 –According to a recent Royal LePage demographic survey^[1], nearly half (48%) of Canadians aged 25 to 35 currently own their home, and 25 per cent of these homeowners purchased a property during the pandemic. Among non-homeowners, there is a strong intention to purchase in the future (84%), with 68 per cent planning to make the move in the next five years. Sixteen per cent say they plan to purchase a property within the year, while 14 per cent say they will buy within one to two years, and 39 per cent are looking to purchase in two to five years.

“The pandemic provided an unexpected prize for young Canadians — a path to home ownership,” said Phil Soper, president and CEO, Royal LePage. “Mortgage rates fell to historically low levels and the competition for entry-level housing lessened. Many investors sought to divest of property as traditional renter groups such as foreign students, new immigrants and short-term renters disappeared behind closed borders.”

Soper noted that much higher than typical demand from this cohort, combined with older homeowners who have been generally more reluctant to put their property on the market during the pandemic, has contributed to a near-crisis shortage of listings in parts of the country.

“Measures necessary to prevent the spread of COVID-19 have motivated many of our younger Canadians to buy, while the health crisis dissuaded many of our older homeowners from selling,” continued Soper. “Some young people living with parents or roommates found their work-from-home environment uncomfortably crowded. Others saw a once-in-a-decade affordability window open on their dream of home ownership. On the other hand, many older homeowners whose homes are adequate for changed employment circumstances have delayed their desire for a housing upgrade until the medical crisis is under control.”

Confidence in Canadian real estate is strong and despite economic challenges related to the pandemic, Canadians aged 25 to 35 have a healthy personal financial outlook. Ninety-two per cent of those surveyed agree that owning a home is a good financial investment. Seventy-two per cent are confident in their short-term financial outlook and 78 per cent are confident in their long-term financial future. Many (40%) have even seen their savings grow since the onset of the pandemic, and 11 per cent saw a significant increase.

“In many ways, the pandemic has sucked the joy out of our normally kinetic young adults’ lives. No dining out, no concerts with friends or winter escapes to the sunny south. Even retail therapy has lost its luster when no one will see those new shoes on the next Zoom call. The silver lining is in soaring savings; unspent money that is finding its way into real estate investments,” said Soper.

Nearly two thirds of Canadians in this age group (63%), who are employed or seeking employment, say the ability to work for an employer that allows the option of remote work is important, a fact that is not surprising given the volume of sales in regions outside of the major urban centres since the onset of the pandemic. Fifty-two per cent said the availability of remote work has increased their likelihood to move further from their current or future place of work. Overall, 39 per cent of this age group are considering a move from their current home to a less dense area as a result of the pandemic, while 46 per cent said the pandemic had no impact on their desire to move to a less dense area.

When given the choice, 45 per cent of those aged 25 to 35 said they’d prefer to live in a city. Similarly, 47 per cent said they would choose small town or country living. The top responses for the most attractive feature of living in a city are walkability (21%) and access to events, attractions and other entertainment options (21%), followed by diversity of people and cultures (18%), and more employment opportunities (17%). The top reasons for wanting to move to a less dense area are access to more outdoor space (62%) and lower home prices (61%), followed by the affordability of larger properties (51%).

Experts across the country noted young buyers felt comfortable with the safety measures in place around the home buying process during the pandemic.

“Younger buyers are exceedingly comfortable with online research, be it for the latest personal tech, a pair of running shoes, or a home,” said Soper. “This group has had no problem adapting to our enhanced use of virtual tours and electronic contracts. We expect the pandemic will have permanently accelerated the acceptance among our clients of using many of our emerging home buying and selling technologies.”

Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey

Regional Insights

Ontario

In Ontario, 44 per cent of residents aged 25 to 35 own their home. Of those homeowners, 26 per cent purchased a home since mid-March of last year. Among those who do not currently own a home, 68 per cent say they intend to buy within the next five years.

Ontarians in this cohort largely believe that home ownership is a good investment (92%), and nearly half of those surveyed (41%) say their savings have increased since last March. Record low mortgage rates and the option to work from virtually anywhere continue to draw young buyers to markets across the province.

In the Greater Toronto Area, 46 per cent of respondents say the pandemic has increased their desire to move to a less densely populated area.

“The pandemic has put a lot of things into perspective, especially for first-time home buyers,” said Tom Storey, real estate agent at Royal LePage Signature Realty in Toronto. “Most of my 25- to 35-year-old clients have fit into one of three distinct buying scenarios over the last year: the softer condo market and low interest rates allowed renters to become owners; move-up buyers who had purchased a condominium a few years ago were able to turn that equity into a down payment on a larger property in the suburbs; or they’ve left the city altogether for a significantly larger space in more affordable places like Hamilton, Guelph, or even cottage country.”

Storey added that this cohort is not expecting to find their dream home straight out the gate. They are interested in taking advantage of some extra savings and low borrowing costs, to invest in a property that has appreciation potential. 

While remaining an affordable alternative to Toronto and Vancouver, Ottawa has seen its housing market appreciate over the last few years, due in part to increased demand from both local and out-of-town buyers, many in the age range of 25 to 35.

“Homes near Ottawa’s downtown have now become unattainable for some in this age group and many buyers look in the various suburbs outside the city centre, which are only a short drive away,” said Justin Millette, sales representative at Royal LePage Team Realty. “Since the start of the pandemic, my clients’ priorities have shifted from location to space and affordability, and the lack of inventory is piling on added pressure to try and get into the market as soon as possible. There is a sense they may be priced out of certain areas if they don’t act quickly.”

Millette added that since last March, he’s seen an increase in younger buyers seeking larger properties, as well as current homeowners looking to upsize. Millette expects to see a shift back to the city once the pandemic is over, especially among this group.

Seventy-one per cent and 75 per cent of those surveyed in Ontario feel confident in their short-term and long-term personal financial outlook, respectively. Forty-three per cent say their desire to move to a less dense area has increased since the onset of the pandemic, and 56 per cent say the option of remote work has increased their likelihood of moving further away from their employer.

Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey

Quebec

In Quebec, demand from buyers aged 25 to 35 has flooded the suburban real estate market over the past year, spurred by low interest rates, the ability to work remotely and the desire to invest in long-term quality of life.

According to the survey, 50 per cent of this cohort in Quebec own their home, compared to 48 per cent in Canada. Of those young Quebec homeowners, 18 per cent purchased a home since mid-March of last year, while 28 per cent of homeowners located in Montreal have purchased a home since the onset of the pandemic, the highest rate among the cities surveyed.

When asked about their intention to buy a property, 17 per cent of Quebec respondents who do not own a property in this cohort said they plan to buy this year, compared to 19 per cent of those living in Montreal. The proportion reaches 69 and 68 per cent respectively, among Quebec and Montreal respondents who do not currently own a home and have the intention to buy within the next five years.

According to Roxanne Jodoin, residential real estate broker, Royal LePage Privilège in Saint-Bruno-de-Montarville, millennials currently are the critical mass of buyers in the Greater Montreal Area.

“Low interest rates and the ability to work from home are the main drivers for young buyers today. Many are also returning to their roots,” said Jodoin. “Some left their childhood homes in the suburbs to go to University in the city but the current economic situation is driving them back home where they can enjoy more square footage, a yard and a space they can call their own. Becoming a homeowner is increasingly important to this generation and it is clear that many of them are taking steps to make that happen.”

The survey results confirm this trend, with 93 per cent of Quebec respondents saying that buying a property is a good financial investment, the second highest region in the country behind the Prairies.

“The real estate market is still very competitive. The clients I assist in buying a property are resilient and persistent. I am impressed by their determination, their financial capacity and desire to invest,” added Jodoin.

According to the survey, Quebecers aged 25 to 35 are the most confident in the country when asked about their financial future. Seventy-eight per cent and 86 per cent of those surveyed in the province say they feel confident in their short-term and long-term personal financial outlook, respectively.

“Multiple-offer situations and bids over the asking price can make the buying process overwhelming. I encourage young buyers to make balanced decisions and make offers on properties that will keep a good value over the years,” concluded Jodoin.

Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey 

British Columbia

In British Columbia, 49 per cent of residents aged 25 to 35 own their home. Of those homeowners, 27 per cent purchased a home since mid-March of last year. Among those who do not currently own a home, 65 per cent say they intend to buy within the next five years.

Strong demand from buyers aged 25 to 35 continues to drive sales in Western Canada. As is the case from coast to coast, many young Canadians in British Columbia (41%) have seen their savings grow since the onset of the pandemic, which has been an important factor in their decision to purchase a home during this time, along with historically low interest rates.

“Low interest rates are oxygen for the market,” said Adil Dinani, sales representative at Royal LePage West Real Estate Services in Greater Vancouver. “Younger buyers have a positive association with home ownership. They see the value in it and they’ve done the math. Currently, a monthly mortgage payment can equate to little more than renting.”

Ninety-one percent of those surveyed in the province believe that home ownership is a good investment. Dinani noted that clients in this age group are thinking more long-term, and low interest rates have made it possible for them to purchase a larger starter home.

“Over the last year, I’ve noticed a shift in priorities where first-time buyers are increasingly valuing size and outdoor space over location,” said Dinani.

Seventy-one per cent and 72 per cent of those surveyed in B.C. feel confident in their short-term and long-term personal financial outlook, respectively. Dinani expects activity among this cohort to remain high this spring and throughout the coming year.

Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey

Alberta

At 56 per cent, Alberta boasts Canada’s highest home ownership rate among those aged 25 to 35. Of those homeowners, 24 per cent purchased a home since mid-March of last year. Among those who do not currently own a home, 71 per cent say they intend to buy within the next five years.

While Alberta’s housing market has remained steady and balanced in recent years, the COVID-19 pandemic has spurred activity among younger buyers, especially in its urban centres. Thirty-seven per cent of Albertans aged 25 to 35 say they’ve seen their savings grow since the onset of the pandemic.

“With a boost in savings from not spending over the past year, many first-time buyers have been able to accelerate their plans by one or two years,” said Doug Cabral, real estate agent at Royal LePage Benchmark. “With the affordability of homes and low interest rates, combined with an increase in down payment, this group has been able to use this time to their advantage.”

Lifestyle, community, ample living and outdoor space, as well as potential resale value are all important factors in the decision-making process for young buyers. Cabral noted a recent increase in activity from out-of-province buyers, namely from B.C. and Ontario.

“Someone from Vancouver or Toronto has real buying power in a city like Calgary, where they can get a lot more space for their money,” said Cabral. “Square footage and improved lifestyle are top priorities for clients across the board.”

Sixty-six per cent and 79 per cent of those surveyed in Alberta feel confident in their short-term and long-term personal financial outlook, respectively. Cabral expects to see a strong spring market, and anticipates that homeowners in the upper end of the market may be looking to leverage equity in their homes to put towards an investment or recreational property.

Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey

Saskatchewan and Manitoba

In the Prairie provinces, 53 per cent of residents aged 25 to 35 own their home. Of those homeowners, 32 per cent purchased a home since mid-March of last year. Among those who do not currently own a home, 65 per cent say they intend to buy within the next five years.

“Most of my clients are first-time buyers in the 25 to 35 age range, currently living at home with family,” said Daniella Payne, sales representative at Royal LePage Prime Real Estate in Winnipeg. “While they know they will likely not win the first home they bid on, they are very motivated and are looking to take advantage of low interest rates and increased savings. They believe working from home, at least in part, is a long-term inevitability and want to ensure they have ample space to work and live comfortably.”

Many young buyers in the area are expanding their searches to include neighbourhoods on the outskirts of major cities, where there is more inventory and more space. Forty-one per cent of the cohort say that the COVID-19 pandemic has increased their desire to move to a less dense area. Payne advises new homebuyers to be prepared to act quickly in order to be successful.

“Buyers should discuss their budget and location preferences, and get their financing in order before they begin their search. If they find their dream home, the window to make an offer can be short on well-priced properties in popular neighbourhoods,” said Payne.

Thirty-six per cent of Canadians aged 25 to 35 in the Prairies have seen their savings increase since mid-March 2020. Seventy-three per cent and 80 per cent of those surveyed in Saskatchewan and Manitoba feel confident in their short-term and long-term personal financial outlook, respectively. Payne expects another year of strong activity from the cohort, especially if interest rates remain low.

Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey

Atlantic Canada

In Atlantic Canada, 48 per cent of residents aged 25 to 35 own their home. Of this group, 42 per cent have purchased a home since mid-March of last year, the highest of all regions surveyed. Of those who do not currently own a home, 75 per cent say they intend to buy within the next five years.

The ability to work remotely and not be tied to a long commute has made young buyers in the Maritimes think about what they really want in a home. Forty-six per cent of those surveyed, who are employed or seeking employment, say the option of remote work has increased their likelihood to move further away from their place of work. Like so many 2020 buyers, they have prioritized the practical use of space and lifestyle over location.

“Within one month of the start of the pandemic, buyers in this age group came out in droves,” said Will Campbell, sales representative at Royal LePage Atlantic in Halifax. “This market is challenging due to a lack of supply. However, young buyers are determined to make a purchase, even if they have to be flexible on location.”

Forty per cent of respondents in Atlantic Canada said their savings have increased since the onset of the pandemic, which is in line with the national average. Seventy-four per cent and 82 per cent of those surveyed in Atlantic Canada feel confident in their short-term and long-term personal financial outlook, respectively.

Campbell noted that first-time buyers are worried they will get priced out of the market if they don’t get in now and take advantage of low interest rates. He expects a brisk spring market with some inventory relief, but likely not enough to satisfy the increasing demand of this cohort.

Royal LePage 2021 Demographic Survey (full national, regional and city-level results): rlp.ca/table_2021demographicsurvey

 

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• Media room: rlp.ca/mediaroom
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About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 18,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.

 

About Leger

An online survey of 2000 Canadians aged 25-35 was completed between December 29, 2020 to January 8, 2021, using Leger’s online panel.

No margin of error can be associated with a non-probability sample (i.e. a web panel in this case). For comparative purposes, though, a probability sample of 2000 respondents would have a margin of error of ±2.2%, 19 times out of 20.

 

For further information, please contact:

Katie Raskina
Proof Strategies
kraskina@getproof.com
(416) 969-2709

TESTIMONIAL

 

Call Diane + Paul

  

For All Your Real Estate Needs
Diane + Paul Laflamme
Courtiers immobiliers
Royal LePage Village
514.793.4514

 

Don't Gamble on Your Next Real Estate Transaction: Call Diane + Paul Laflamme, RLP Village.

 Diane + Paul Laflamme
Courtiers immobiliers
Royal LePage Village
514.715.4514
plaflamme@royallepage.ca

Drive carefully!

 

 

Buy Canadian

 IN LIGHT OF ALL THE JOBS AND COMPANIES THAT ARE BEING CLOSED DOWN AND RELOCATED...THIS IS DEFINITELY SOMETHING TO THINK ABOUT...
 
A physics teacher in high school once told the students: that while one grasshopper on the railroad tracks wouldn't slow a train very much, a billion of them would. With that thought in mind, read the following, obviously written by a patriotic Canadian.
 
Shopping in Home Depot the other day for some reason and just for the fun of it I was looking at the garden hose attachments. They were all made in China ... The next day I was in Home Hardware and just for the fun of it I checked the hose attachments there. They were made in Canada ! Start looking...In our current economic situation, every little thing we buy or do affects someone else - even their job.
 
A quote from a consumer: "My grandson likes Hershey's candy. I noticed, though, that it is marked made in Mexico now, instead of Smiths Falls , Ontario. I do not buy it any more".
 
My favorite toothpaste, Colgate, is made in Mexico now. I have switched to Crest. You have to read the labels on everything.
 
This past weekend I was at Wal-Mart. I needed 60W light Bulbs. I was in the light bulb aisle, and right next to the GE brand I normally buy was an off-brand labelled, "Everyday Value". I picked up both types of bulbs and compared the stats - they were the same except for the price. The GE bulbs were more money than the Everyday Value brand but the thing that surprised me the most was the fact that GE was made in MEXICO and the Everyday Value brand was made in - (get ready for this) - Canada at a company in Ontario.
 
Their Equate Products are also made in Canada, and are very good.
 
Just to add my own experience on buying Made in Canada , I was looking for canned mushrooms that were made in Canada and could never find any, so I would buy fresh. But recently I found Ravine Mushrooms - made in Canada with a little red maple leaf on the can. A little more money but when I opened the can I looked at Mushrooms that look like real mushrooms, not a mushroom that looks like it was cleaned in bleach.
 
Another product I no longer buy is Del Monte or Dole canned fruit. Del Monte is packaged in Taiwan and Dole is now a product of China . Why should we pay for their fruit when our growers are left with fruit rotting on the Trees. E.D. Smith is still made in Canada. Buy theirs, at least you will know what is in it and have some quality control.
 
By the way, all pickles with the President’s Choice label and the No Name yellow label [Superstore] are made in India .. Think about it, Water from the Ganges is used... Yes THAT Ganges , the one that the People use as a toilet
 
So throw out the myth that you cannot find Products you use every day that are made right here. My challenge to you is to start reading the labels when you shop for everyday things and see what you can find that is made In Canada.
 
The job you save may be your own or your neighbour's'! (Your children & Grandchildren, also.)
 
If you accept this challenge, pass it on to others in your address book So we can all start buying Canadian, one light bulb at a time! Stop buying from overseas companies!
 
(We should have awakened two decades ago.) Let's get with the program. Help our fellow Canadians keep their jobs and create more jobs here in Canada!
 
BUY CANADIAN! Read the labels .Support Canadian Jobs . Brighten your day.

Is now the time to downsize?

 

To downsize or not to downsize – that is the question for Canada's baby boomers

By Clayton Jarvis

One Canadian real estate trend that has fallen off the radar in the wake of the COVID-19 pandemic is that of baby boomers downsizing out of their spacious detached homes and relocating to less maintenance-heavy alternatives like condos, townhouses, or even single-storey homes in less densely populated communities.

With real estate markets in many cities still glowing hot after a sizzling 2020, homeowners nearing retirement are sure to be asking themselves if now is the time to pull the trigger and cash out while virtually the entire country remains a seller’s market.

For at least two realtors, the answer to that question is a resounding ‘yes’.

Selling: The case for

Keisha Telfer and Vincent Côté, co-owners of Transitions Realty, told Mortgage Broker News that the intense demand for single-family homes, sparked by COVID-19-triggered desires for privacy and sufficient room in which to live/work/teach without going insane, make early 2021 an opportune time for homeowners to scale down.

“Young families are looking to move into larger family homes because they need more space,” Telfer said. “Boomers own most of these homes, so they have the opportunity right now to look at their personal finances through the lens of real estate.”

Downsizing comes with several benefits – drastically decreased maintenance demands, lower monthly carrying costs, etc. – but chief among them may be the concept of control. By downsizing in the early stages of retirement, Telfer explained, baby boomers can use the equity they have built up over the decades – sure to be enormous in certain highly priced markets – to shape their future while they’re still young enough to make their own decisions and live the kind of independent lives they have envisioned for themselves.

“It could potentially lend itself to aging in place,” she said.

But demand for single-family homes is nothing new in Canada; it’s been unquenchable for the past six years. Does capitalizing on it really require liquidating a property in the first few months of 2021? Why not ride the appreciation for another few years?

“That is an option,” Côté said. “Obviously it depends on a person’s situation and where they’re at in life. If they’re thinking about downsizing, if they think now might be the right time, they should absolutely look at it because of the trends we’re seeing.”

Telfer said many boomers have considered holding their properties or renting them out but added that “what we’re typically seeing is people are selling their homes.” Renting comes with risks like vacancies, late payments, and damage, while holding a property could mean no equity retrieval; most boomers won’t be able to consider downsizing without first factoring in the sale of their current homes.

There is also the question of homeowners downsizing into condos at a time when many Canadian condominium markets are struggling under a combination of sluggish sales and falling prices. Côté explained that the situation may be stressful for current condo owners, but it presents an opportunity for prospective buyers.

“If the plan for them is to downsize their large, multi-bedroom home and move into a smaller condo, it’s kind of a buy low/sell high kind of situation,” he said. “They could be selling their house on a high and buying a condo in a little bit of a dip, so that could be a bonus to them.”

Downsizers, he and Telfer insisted, aren’t limited to buying condos. Developers are now designing their projects with the needs of boomers in mind, outfitting them with amenities that allow them to remain active while also setting aside space for must-haves like healthcare facilities and pharmacies. Such master planned communities are popping up all over Ontario.

“It’s an environment you really see people flocking to,” Côté said.

Downsizers can also ease themselves into the process by purchasing pre-construction. Cara Hirsch, CEO of Hirsch and Associates, says 65% of the buyers for one of the projects she is marketing in Toronto are over 55 and looking to scale down.

“We find boutique buildings tend to attract downsizers and empty nesters as it’s a little easier to adapt to the condo lifestyle coming from a house versus if they were to move into a high-rise,” Hirsch told MBN. “We have seen this number steadily increase over the years as more end users are becoming comfortable with pre-construction and the three- to five-year timeline to move in.”

Selling: The case against

Not everyone believes baby boomers should move on from their single-family homes, even if they are becoming a burden.

“In my view, clients get wealthier keeping the real estate, not selling it,” said investor-focused broker Dalia Barsoum of Streetwise Mortgages. “Having said that, holding on to the property has to make financial sense given the client’s goals, lifestyle and monthly budget.”

Prior to selling, Barsoum suggests homeowners evaluate the possibility of leveraging their home equity to make a down payment on a new property so they can rent out the original home. Such a decision, she said, involves three main considerations: will the rent cover all the expenses associated with keeping the asset, is the retiree open to the idea of becoming a landlord (and if not, will the property support hiring a property manager), and will the homeowner be comfortable using a traditional down payment-plus-financing strategy to pay for the next property rather than paying for it outright with the proceeds of a sale.

There are other strategies Barsoum says are available to homeowners who would like to bolster their retirement income. If, after cashing out and securing a new residence, they have a sizeable amount of earnings left over, they could use that excess capital for private lending, thereby securing a predictable monthly income. Others, she says, “choose to leverage the portfolio so they can deploy a lending strategy, while still keeping the asset rented for cash flow”, leaving open yet another possibility: passing the property on to the next generation.

 

Testimonial

 

ROYAL LEPAGE: Q4 2020 HOUSE PRICE UPDATE

 

The Royal LePage Q4 2020 House Price Update was distributed to the media early this morning. The release includes insights from experts across the country, and data from the Royal LePage House Price Survey, which presents home price trends across 63 real estate markets in Canada.

Royal LePage: More than half of Canada’s largest real estate markets see double-digit price growth as national home values soar 9.7% in fourth quarter

Fourth quarter regional highlights:

• Price of detached homes continue to outpace condominiums as Canadians trade location for square footage
• Despite strong push toward the suburbs, Toronto and Montreal single-family homes see double-digit price gains in city centres
• Median price of a two-storey home in Greater Vancouver rises 8.8% as buyers prioritize square footage
• Out-of-region buyers spur Maritimes’ home prices, as option of remote work and demand for large, affordable properties grows
• Aggregate price of a home in Canada rose $206,815 since Q4 2015

TORONTO, January 15, 2021 –According to the Royal LePage House Price Survey released today, the aggregate^[1] price of a home in Canada increased 9.7 per cent year-over-year to $708,842 in the fourth quarter of 2020, as strong seller’s market conditions continued to shape Canada’s real estate market through the end of the year. The significant year-over-year increase in aggregate price was driven by price gains for larger properties. Sixty-four per cent of all regions surveyed showed year-over-year median price gains of more than 10 per cent for two-storey homes.

The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the median price of a standard two-storey home rose 11.2 per cent year-over-year to $840,628, while the median price of a bungalow increased 10.0 per cent to $592,899. The median price of a condominium increased 3.9 per cent year-over-year to $509,239. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.

“In April 2020, we issued our pandemic period forecast for Canadian real estate, the principle prediction being that unexpectedly soft spring home prices, historically low interest rates, and years of pent-up demand would trigger a sharp recovery of sales volumes and rising property prices in the second half of the year,” said Phil Soper, president and CEO of Royal LePage. “As we close the books on the strangest year in my long career, ‘recovery’ proved to be an understatement. Looking at fourth quarter results we can state without hyperbole that the health crisis triggered a real estate boom.

“High levels of unresolved housing demand and low inventory levels will likely characterize the 2021 spring market, putting further upward pressure on housing values, particularly in the detached and larger townhome segments, as families with access to extremely low borrowing costs trade traditionally desirable urban locations for more personal space,” he continued.

Nationally, Ontario posted the highest year-over-year aggregate home price gains in dollar value during the fourth quarter. During this period, the aggregate price of a home in Markham increased $133,932 to $1,100,436, the highest dollar value increase in aggregate home price. Markham was followed by Vaughan, which increased by $132,699 to $1,130,483; Burlington, which increased by $115,475 to $950,796; Pickering, which increased by $110,905 to $856,725; and, Oakville, which increased by $109,912 to $1,215,405.

“Confined to their homes, Canadians are struggling to adapt their properties to accommodate the need for an office, school classroom and gym, and find themselves longing for more living space,” said Soper. “Yet buying a house is not like buying a car; for most it is a long-term commitment. Post-crisis, some employers will be accommodating of work-from-home employee requests, and some businesses will require that their teams work together in offices again. Many will adopt a hybrid model. Home shoppers should look at prospective neighbourhoods through a post-pandemic eye, paying careful attention to the things that will matter when we drop our masks, including restaurants, access to entertainment and even walkability.”

Soper added that the surge in sales that characterized the second half of the year is a sign that Canadians feel confident buying and selling properties during the pandemic.

“The real estate industry has shown that buying and selling property can be done safely as much of the search and purchase process can now be done online,” he said. “Our real estate agents can help families looking for a home with efficient digital showings. Physical private viewings of a short-listed property should be done in compliance with best practice and public health guidelines. Clients can use their phone or computer to complete the transaction, leveraging today’s advanced technologies.”

While many Canadians have been seeking larger homes outside of urban centres, demand for properties in Canada’s largest urban centres have remained high. Ottawa’s aggregate price increased 14.9 per cent year-over-year to $568,608 during the fourth quarter, the greater regions of Montreal, Toronto and Vancouver increased 12.4 per cent, 10.4 per cent and 7.2 per cent to $487,380, $936,510 and $1,155,346, respectively.

Strong demand in the fourth quarter also resulted in price stability in Canada’s energy and agriculture regions. During the period, the aggregate home price in Saskatoon, Regina and St. John’s increased year-over-year by 6.3 per cent, 3.4 per cent and 0.8 per cent to $400,173, $327,517 and $325,833, respectively. Edmonton and Calgary’s aggregate home prices remained relatively stable, dipping 0.1 per cent and 0.5 per cent to $372,515 and $467,041, respectively.

Demand from local buyers and those relocating back to the Maritimes put significant upward pressure on prices. During the quarter, Halifax posted the highest increase in aggregate price, rising 17.1 per cent year-over-year to $377,469. Charlottetown posted the second highest increase in aggregate price rising 12.7 per cent year-over-year to $344,823, during the same period.

In December 2020, Royal LePage issued its 2021 forecast stating that the national aggregate price of a home is expected to increase 5.5 per cent year-over-year. To read more about Royal LePage’s national and major urban centre forecast, please go to rlp.ca/2021-forecast.

REGIONAL SUMMARIES 

Greater Toronto Area

The aggregate price of a home in the Greater Toronto Area (GTA) increased 10.4 per cent year-over-year to $936,510 in the fourth quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 11.9 per cent year-over-year to $1,102,155 in the fourth quarter, and the median price of a bungalow rose 12.8 per cent year-over-year to $923,047. During the same period, condominiums in the region continued to see healthy price appreciation, with the median price rising 3.6 per cent year-over-year to $593,811.

With the exception of condominiums, similar strong home price gains were seen in the City of Toronto where the aggregate price of a home rose 7.4 per cent year-over-year to $960,368 in the fourth quarter. Broken out by housing type, the median price of a standard two-storey home increased 10.6 per cent year-over-year to $1,446,184, and the median price of a bungalow rose 12.3 per cent year-over-year to $1,001,083. During the same period, the median price of a condominium grew 1.4 per cent year-over-year to $634,081.

“Throughout the second half of 2020, buyers were looking for as much space as they could afford. While many buyers shifted their target neighbourhood away from the city centre, so few properties for sale meant that most detached listings saw multiple-offer scenarios,” said Debra Harris, vice president, Royal LePage Real Estate Services Ltd. “2020 did bring some balance to the region’s condominium market but larger units, often in the greater region, are still in high competition.”

Harris added that pent-up demand in the GTA remains significant for detached homes and inventory levels will be a leading indicator of price appreciation in the spring market.

“The GTA real estate market could absorb a short-term influx of detached home listings and remain in a seller’s market. If inventory remains low, prices can only go up,” said Harris.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in the Greater Toronto Area will increase 5.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Greater Montreal Area 

In the Greater Montreal Area, the aggregate price of a home posted a 12.4 per cent increase year-over-year reaching $487,380 in the fourth quarter of 2020. When broken down by housing type, the median price of a standard two-storey home increased 13.6 per cent year-over-year to $619,099 in the fourth quarter, and the price of a bungalow rose 15.3 per cent year-over-year to $391,493. During the same period, condominiums in the region continued to see strong price appreciation, although at a slower pace than single-family homes, with the median price rising 8.1 per cent year-over-year to $367,113.

In the core of Montreal, the aggregate price of a home rose 10.8 per cent year-over-year to $613,268. Broken out by housing type, the median price of a standard two-storey home increased 13.3 per cent year-over-year to $836,790, and the price of a bungalow rose 12.1 per cent year-over-year to $582,225. During the same period, the median price of a condominium grew 7.1 per cent year-over-year to $442,317.

“Conditions were favourable to make 2020 a year of strong growth for Montreal’s real estate market,” said Dominic St-Pierre, vice-president and general manager of Royal LePage for the Quebec region. “During the first wave of the health crisis, it was difficult to predict how it would impact the economy and, more importantly, consumer behaviour. We could have seen a price correction if buyers had left the market. But low interest rates, combined with increased household savings from remote work and new buyer incentives, played a key role in a market that was already highly competitive before the pandemic. In the suburbs and on the Island of Montreal, activity in the single-family segment resulted in double-digit price increases in most neighbourhoods of the Greater Montreal Area.

“Historically, the Montreal core has always been the hottest spot for both sales activity and prices. No one could have predicted before COVID-19 that the pace of markets on the outskirts of Montreal would outpace the city,” said St-Pierre.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in the Greater Montreal Area will increase 6.0 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Greater Vancouver 

The aggregate price of a home in Greater Vancouver increased 7.2 per cent year-over-year to $1,155,346 in the fourth quarter of 2020. Broken out by housing type, the median price of a standard two-storey home increased 8.8 per cent year-over-year to $1,507,279 in the fourth quarter, and the median price of a bungalow increased 6.8 per cent to $1,265,285. During the same period, the median price of a condominium increased 3.3 per cent year-over-year to $662,120.

In the city’s centre, the aggregate price of a home rose 5.7 per cent year-over-year to $1,306,820 in the fourth quarter. Broken out by housing type, the median price of a standard two-storey home increased 7.3 per cent year-over-year to $2,113,504, and the price of a bungalow rose 4.1 per cent year-over-year to $1,424,474. During the same period, the median price of a condominium grew 3.9 per cent year-over-year to $784,351.

“Multiple offers were common throughout the fourth quarter and almost every detached home was attracting competitive bids. Buyer confidence is strong and current low interest rates make purchasing even more attractive,” said Randy Ryalls, general manager, Royal LePage Sterling Realty. “Buyers are worried they will be priced out of the market and with our low inventory of homes for sale in the region, prices are expected to go up in the spring.”

Ryalls added that while new listings slowed in the fourth quarter, which is consistent with seasonal trends, the pipeline of buyers continues to grow.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Greater Vancouver will increase 9.0 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Ottawa 

The aggregate price of a home in Ottawa increased 14.9 per cent year-over-year to $568,608 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 14.8 per cent to $595,991, while the median price of a bungalow increased 15.9 per cent to $588,320, and the median price of a condominium increased 13.8 per cent to $385,525.

“The strong seller’s market is expected to persist through 2021, as demand continues to outpace supply in Ottawa,” said Jason Ralph, managing partner, Royal LePage TEAM Realty. “The city is more affordable than Vancouver or Toronto and that’s attractive to both first-time buyers and young professionals from across the country, especially those with families.”

Ralph noted that prices are set to continue a steady upward climb as potential buyers who were unsuccessful purchasing in 2020 re-enter the upcoming spring market.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Ottawa will increase 11.5 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Calgary 

The aggregate price of a home in Calgary dipped slightly by 0.5 per cent year-over-year to $467,041 in the fourth quarter of 2020. During the same period, the median price of a two-storey home decreased 0.5 per cent to $512,107, while the median price of a bungalow increased 0.5 per cent to $493,164, and the median price of a condominium decreased 3.7 per cent to $248,840.

“Calgary remains an attractive place to purchase a home, partly due to its affordability relative to other major cities in Western Canada,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “With inventory levels the lowest we’ve seen in nearly two decades, specifically in the single-family detached market, I expect a brisk spring market in 2021.”

Lyall added that all signs point to continued stability in the region as an increase in immigration next year will likely create new opportunities for investors, and those looking to relocate to the region as remote work remains a viable option for many.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Calgary will increase 0.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

 Edmonton 

The aggregate price of a home in Edmonton dipped slightly by 0.1 per cent year-over-year to $372,515 in the fourth quarter of 2020. During the same period, the median price of a two-storey home remained flat at $427,530, while the median price of a bungalow increased 0.4 per cent to $360,996, and the median price of a condominium decreased 1.3 per cent to $217,141.

“Edmonton’s housing market has been relatively flat throughout the pandemic, with sellers hesitant to list their homes due to safety concerns. However, the resilience of Edmonton’s home prices during the pandemic is reassuring to both buyers and sellers,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate. “I anticipate a brisk spring market, as consumer confidence rises once a vaccination plan is well underway.”

Shearer added that demand for detached homes, driven by young families, remains strong and low inventory in this segment of the market is expected to put upward pressure on prices in the new year.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Edmonton will increase 1.5 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Halifax 

The aggregate price of a home in Halifax increased 17.1 per cent year-over-year to $377,469 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 17.5 per cent to $399,282, while the median price of a bungalow increased 19.4 per cent to $335,744, and the median price of a condominium increased 4.0 per cent to $301,615.

“Inventory levels have hit historic lows in recent months, putting continued upward pressure on prices,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “Local buyers are looking for more space, and now, more than usual, they are competing with out-of-province buyers, many of whom are returning to the Maritimes. The option of remote work has altered the landscape of the real estate market.”

Honsberger added that many new construction projects are experiencing delays due to uncertainty surrounding the pandemic, further contributing to the supply shortage.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Halifax will increase 7.5 per cent in the fourth quarter of 2021, compared to the same quarter in 2020. 

Winnipeg

The aggregate price of a home in Winnipeg increased 7.1 per cent year-over-year to $330,273 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 11.4 per cent to $372,915, while the median price of a bungalow increased 3.7 per cent to $307,841, and the median price of a condominium increased 0.2 per cent to $231,500.

“That remote work will remain an option indefinitely is a reality for many Canadians, resulting in continued high demand for homes with more space,” said Michael Froese, broker and manager, Royal LePage Prime Real Estate. “As long as the supply shortage continues in Winnipeg and the surrounding communities, prices will remain buoyant.”

Froese added that the pace of sales has been exceptionally brisk. In the fourth quarter of 2020, the median number of days a detached home spent on the market was ten, compared to 27 during the same time period in 2019.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Winnipeg will increase 4.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Regina

The aggregate price of a home in Regina increased 3.4 per cent year-over-year to $327,517 in the fourth quarter of 2020. During the same period, the median price of a two-storey home increased 4.2 per cent to $402,903, while the median price of a bungalow increased 2.1 per cent to $295,421, and the median price of a condominium rose 8.2 per cent to $222,210.

“The trend of steadily increasing prices that we’ve seen over the last year in Regina will likely extend into the spring, as the need for more space continues to drive demand,” said Mike Duggleby, broker and owner, Royal LePage Regina Realty. “We are experiencing an inventory shortage, like many cities in Canada. Until supply can keep up with growing demand, prices will keep climbing.”

Duggleby added that the return of international students to the region will put further upward pressure on prices, specifically in the condominium segment.

In December, Royal LePage issued a forecast projecting that the aggregate price of a home in Regina will increase 2.75 per cent in the fourth quarter of 2021, compared to the same quarter in 2020.

Royal LePage Home Price Data:

Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2020 

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Royal LePage’s media room contains royalty-free assets, such as images and b-roll, that are free for media use.

 

About the Royal LePage House Price Survey

The Royal LePage House Price Survey provides information on the three most common types of housing, nationally and in 62 of the nation’s largest real estate markets. Housing values in the Royal LePage House Price Survey are based on the Royal LePage Canadian Real Estate Market Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

 About Royal LePage

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of over 18,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Bridgemarq Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information, please visit www.royallepage.ca.

For further information, please contact:

Katie Raskina
Proof Strategies
kraskina@getproof.com
(416) 969-2709