The concern and uncertainty brought on by COVID-19 has impacted many markets in various industries around the world, including the housing market. April 2020 saw a decline in housing sales and prices, as well as a decrease in new development due to pandemic-related restrictions. However, the Canadian government was quick to act with a stimulus plan, resulting in measures that saved the housing market from an anticipated downfall. Now that the market has survived the initial backlash of this worldwide pandemic, many are wondering what they can expect from the Canadian housing market in 2021.
As a real estate broker in Toronto, Michelle Kam has extensive insight into the Canadian housing market. After graduating with honours from York University, she began working with Re/Max where she quickly found her niche in high-end, million-dollar properties. Michelle developed her expertise in the urban market, with a focus on condos, lofts, and townhomes. She has worked with some of the best in the real estate business, including Concord Alex and Baker Real Estate. This has allowed her to establish a niche in high volume sales and to learn the ins and outs of the pre-sale market. After years of working under the Re/Max brand, Michelle earned her Brokerage License and started City Accord Realty Inc., Brokerage at the request of her large and loyal client base. In June 2016, after 10 years of owning and operating her real estate brokerage, Ms. Kam was fortunate enough to meet Jamie Johnston, owner of Re/Max Condos Plus and she decided to jump back onto the Re/Max brand. Michelle is intimately familiar with housing market trends and offers her insight into Canada’s housing market in 2021.
Market Recovery
The COVID-19 pandemic took a toll on economies throughout the world, affecting employment stability and income, as well as financial markets. In turn, this impacted new housing developments and real estate sales throughout Canada and the world at the onset of the pandemic. Fortunately, with the help of the Canadian government’s stimulus plan, the Canadian housing market managed to survive these economic impacts. CERB was a significant factor in stimulating the economy during this time of doubt and played a major role in helping the Canadian housing market to remain robust. Over the past few months, the housing market in Canada celebrated record sales and an increase in the average housing price. This trend is expected to continue as the market recovers from the initial shock of the pandemic. Throughout 2021, real estate experts like Michelle Kam expect to see continued increases in housing development, sales, and prices.
Increased Demand
The demand for housing is expected to increase significantly in the new year, says Michelle Kam. Following decreased spending in 2020, pent-up demand is expected to result in significantly increased sales through 2021. This momentum in the market will also be fuelled by continued record-low interest rates. Due to the low cost of borrowing, Canadians will be in a great position to buy as the market begins to recover. In addition, as immigration has slowed due to pandemic-related travel restrictions, the reopening of international borders will mean an increase in demand for housing.
Recovering Prices
Real estate prices are also projected to recover in 2021, with prices for particular housing categories continuing to increase towards the levels seen before COVID-19 throughout the year. The recovery of housing prices will be the result of increased demand and a short-term lack of supply.
Due to changing consumer demands, as a result of the pandemic, the most significant increase in prices will be experienced with larger properties that are farther removed from major city centres. Michelle Kam notes that, as people require more space for at-home work, detached homes and larger properties, in particular, will experience the most dramatic price gains. Prices for condos and apartments, on the other hand, may remain relaxed, as people being to look for larger homes outside of the city.
Meanwhile, with condos and houses in the city being freed up, buyers who were previously beat out by the competition prior to the pandemic will have new opportunities to purchase them.
Increased Development
An increase in new housing developments is also likely in 2021. As the restrictions on construction, that have slowed or prevented new developments in recent months, begin to lift, an incline in housing starts is expected. The anticipated increase in demand for housing will also help to fuel a surge in new developments. As demand and development begin to soar through 2021, real estate brokers like Michelle Kam are predicting pre-construction sales to boom.
A Time to Buy
For those looking to buy, especially condos and apartments in high-rise buildings, 2021 is expected to be a good time to invest, says Michelle Kam. While prices for particular properties, including detached homes, begin to soar, prices for condos and apartments are anticipated to remain slightly relaxed. Increased supply, due to the demand for other property types, will maintain these relaxed prices, offering buyers an opportunity to make a move or enter the market. This, along with extremely low interest rates, will result in a great time to buy, especially for those looking to purchase condos and apartments in urban areas.
Michelle Kam on Housing Trends for the Future
Home buyers can also expect to see changes in the design, layout and amenities of new condos, apartments, and other housing communities starting in 2021. These anticipated changes can be largely attributed to the new way of life established by the pandemic. As a result of COVID-19, many people have found themselves working from home and socially distancing from others. If Canadians continue to see this trend persist, then new housing implementations will undoubtedly be made by developers. As homeowners begin looking for more square-footage, green space, and shared functional space, it is expected that developers will focus on creating these types of environments in order to enhance condo and apartment living.
Re-imagined spaces may include larger outdoor areas, dedicated zones for parcel and grocery deliveries, videoconferencing rooms, and other workspaces for employees working from home. Improved amenities, within buildings or walking distance, may also become the norm. As a real estate broker, Michelle Kam suggests that condos, in particular, could see a massive shift in development trends, as developers work towards creating improved functional spaces with new living restrictions in mind.
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