Canada Real Estate Market 2020
Wednesday Mar 04th, 2020Share
Is Canada's real estate market recovering?
The real estate market in Canada is undergoing some exciting changes. Areas like Vancouver and Toronto had an underwhelming showing in the first half of 2019 but did pretty good near the end of 2019. There are similar results for other areas in Canada, and this is great for everyone. The steady rise in mortgages and the slight increase in units sold is what made the end of 2019 a great time for real estate in Canada. Will this hold up in 2020 and beyond? Let's take a look.
An underwhelming time for Canadian real estate
Canada experienced a few years of underwhelming real estate performance. It is no secret that Canada has gone through some rough times with real estate in the past. Most of these issues revolved around the theme of overvaluation.
Overvaluation means that something is artificially inflated in price. This can be not very good for real estate investors and homeowners in general. An example of this is if you buy a home to flip for 100,000 dollars but flip it for only 80,000 because the actual value of the house was overvalued.
An example for homeowners would be a little more similar. A homeowner buys a home at an overvalued price of 100,000 dollars and looks to sell maybe ten years later so they can move. Now, this home is only worth 60,000 dollars. When markets level out from the effects of overvaluation, this can be a possibility. When you apply this effect to the market as a whole, it causes a lot of issues.
The Canadian market for luxury homes, ordinary residential homes, and possibly commercial real estate looks like they're leveling out. The market seems like it's recovering. So will this last past 2020?
The real estate market recovery
The Canadian real estate market is showing a decent recovery. Canadian Real Estate Association (CREA) thinks that the number of units to be sold in 2020 is going to be pretty good. Some estimates state this number to be a little over 500,000 units.
That is good news. This is also paired with an increase in the price of about 6 percent. This makes it even better. Not only are sold units expected to increase but the average price per unit as well. This is great for the real estate agent that is looking to make 2020 a great year. After a bit of a slump in 2018, this news is excellent.
For homeowners and investors, this can be good and bad. A sound investment strategy is to buy low when you can. A rise in price means a better return but also means more money to invest initially.
The Canadian real estate market in places like Toronto and Vancouver is showing signs of recovery. Not only are units sold predicted to increase, but the price per unit is as well. This is going to make 2020 a great year for everyone involved in the real estate market.