As we approach the beginning of a new decade, it’s fair to say that 2019 was a year of recovery for Canada’s resale housing market. Now let’s take a look at what 2020 may hold.
The Canadian Real Estate Association recently adjusted its resale housing market forecast, predicting stronger price gains in markets with low supply, like Ontario.
The CREA does not expect the Bank of Canada to increase interest rates in 2020, and the First-Time Home Buyer Incentive, the $1.25 billion shared equity program, is expected to fuel demand.
In the second half of 2019, home sales activity improved better than expected, so many markets tightened as new listings fell off. This led to significant price gains in areas like the Greater Toronto Area.
By the end of 2019, the CREA predicts home sales will hit approximately 486,800, which would be 6.2% higher than the five-year low hit in 2018. Ontario and Quebec led the way in sales activity this year, increasing 9% and 11%, respectively.
Oakville-Milton had the highest average home price in November 2019, coming in at $1,033,700, up more than 5% compared to a year ago. The greatest year-over-year price gain in Canada was in Ottawa, where the average price jumped more than 11% to $443,500.
On a national level, the average price of a home will come in just over $500,000 by the end of the year, which is 2.3% higher than a year ago. The increase is partially due to big gains in Ontario.
Looking ahead to 2020, the CREA estimates national home sales to come in around 530,000, which would be nearly a 9% increase. The average home price in 2020 is expected to increase 6.2% to $531,000, led by solid gains in Ontario.