The current outlook for 2021 is that Greater Vancouver will continue in a seller’s market. Although this can sometimes be worrisome for buyers, there are steps you can take to be successful and find a home you love, at a price within your budget. If you are well prepared, and work with a knowledgeable Realtor, you will avoid pitfalls, and get the home you want.

Below are some key points to consider to be confident, successful and make the process as worry-free as possible:

  • Don’t wait to make an offer. With more buyers than homes available, you need to be prepared to decide and act quickly. Make a checklist of the top criteria for your perfect home (location, layout, yard size, etc) so you’ll know when you see it, and you’ll be ready to move forward.
  • Get pre-approved. If there are competing offers, you will be better prepared to make an offer quickly, if you are already pre-approved. This will send a strong message to the seller that you’re a serious buyer.
  • Fewer subjects will put you in a stronger position. If you write in numerous subjects, the seller will view your offer as less appealing than one of similar value with minimal subjects.
  • Make a strong opening offer. We all want to buy for as little as possible but coming in below asking price in a competitive market may not be the best strategy. A knowledgeable Realtor will know if the home is accurately priced compared to similar homes in the area, and they will advise you accordingly. If you really want the property, come in with a strong first offer.
  • Submit deposit with offer. Submitting a deposit with your offer may look attractive to a seller weighing multiple offers. Consulting with a knowledgeable Realtor will help determine if this is a good strategy for your situation.
  • Leave closing dates open. Allowing the seller to select their preferred closing dates could put you a step ahead of other offers.
  • Be prepared for a bidding war. Don’t fear a bidding war, just be prepared. Set your search below your max budget to leave room for an over-asking bidding war. This will allow you to stay within budget and get that home you really want.

To ensure you don’t miss out on that special home you’ve fallen in love with, call or message me (604.365.2552) and let’s have a conversation. I’m here to help.

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Every year is unique, but 2020 was truly unlike anything we’ve ever experienced in the Canadian real estate market. No one could have predicted that a pandemic would sweep across Canada, slowing the market initially and then driving prices upward in many regions across the country. Many markets across Canada even saw historically strong levels of activity as things picked up very quickly after a short period of inactivity.

Trying to foresee where things are headed this year is a difficult task, but we think these trends are certainly worth paying attention to over the next 12 months. If all five of these trends continue, it should be a very busy year for Canadian real estate.

Here are five Canadian real estate market trends to watch in 2021:

  1. A steady increase in home prices

  2. Detached homes will be in high demand

  3. Monthly home sales numbers will fluctuate less

  4. Mortgage rates will remain depressed

  5. Potential rental resurgence could change trends

1.  A steady increase in home prices

The Canadian Real Estate Association predicts that the national average home price will rise 9.1% in 2021, and if you’ve been following the market, that’s really not hard to imagine. Noting improving economic conditions, the association says that markets across Canada should either hold in terms of pricing or climb higher.

It’s important to point out that this is one of the most bullish forecasts, but nevertheless, most models from industry professionals and economists are predicting increases. Royal LePage, for example, is predicting a 5.5% increase in home prices across the country, citing limited inventory and unmet demand as the major market drivers. The company is predicting a 9% rise in Vancouver, a 5.75% increase in the Greater Toronto Area, a 0.75% and 1.5% increase respectively in Calgary and Edmonton, and a whopping 11.5% increase in Ottawa. Their full forecast for major Canadian cities is projecting no aggregate losses at all.

2. Detached homes will be in high demand

Many factors should contribute to the expected increase in home prices across Canada this year, but it’s hard to overlook the impact of detached home sales on the market. Detached homes are already typically more expensive than condos, so seeing their demand rise should bring up overall sales volume. While condos are expected to see modest gains over the next year, detached homes are expected to become even higher in demand in every major Canadian city. Young families looking for more space, more home offices, and places to entertain once the pandemic passes are expected to drive the demand for detached homes to new highs, so keep an eye on this trend in 2021. Should the pandemic continue into the summer and fall, this demand could easily continue well into 2022.

For sellers, this is big news. It will be a seller’s market in most Canadian cities this year, and homeowners looking to downsize can expect to see a lot of interest in their detached homes. In a recent survey, 84% of RE/MAX agents and brokers agreed that 2021 would be a seller’s market, largely due to the high demand for more space and low-interest rates.

3. Monthly home sales numbers will fluctuate less

One of the most notable things about the real estate market in 2020 was the wild monthly sale number swings, largely an effect of the COVID-19 pandemic. The CREA expects sales volumes to surge 7.2% to around 584,000 in 2021, but that total number will very likely be more evenly spread out over the year than in 2020. After things began to slowly open up last year after the initial lockdown period, interest in real estate peaked, and buyers flooded the market with offers. This year should have fewer fluctuations.

4. Mortgage rates will remain depressed

To further support borrowing, we’d expect mortgage rates to remain low throughout 2021. The extremely low rates that were introduced last March to calm the markets have enticed first time home buyers who didn’t have their incomes affected by the pandemic. If mortgage rates do stay low throughout the year, which we’d fully anticipate, expect to see the real estate market remain very busy. For many, it’s being viewed as a welcomed opportunity to enter the market.

Interest rates remain low when The Bank of Canada wants to encourage spending and stimulate the economy, and given the challenges Canadians have faced resulting from the pandemic, that’s exactly what they intend to do. The Bank of Canada has stood by its comments last year where they claimed that rates would remain low until 2023, which is how long they expect it to take for the economy to make a full recovery.

"Canada's economic recovery will continue to require extraordinary monetary policy support," the bank said in October 2020. "We remain committed to providing the monetary policy stimulus needed to support the recovery."

Statements like this should give market watchers confidence that mortgage rates will remain low throughout 2021 and beyond.

5. A potential rental resurgence could change trends

Renters could seriously change how the market looks in 2021. We’d expect renters to return to cities in larger numbers once vaccination levels reach the point where a herd immunity to COVID-19 can be established, which would be a trend worth watching. Many people moved back home with family when the pandemic began, but don’t expect that trend to stay around forever. When renters return to major city centres, investors should reenter the condo market, or at the very least be less inclined to sell. It may take until the end of 2021, but keeping an eye on where renters are choosing to live is a great way to tell where condo prices are headed in 2021 and beyond.

We’ll be watching these five real estate trends very closely in 2021, especially given how fast we’ve seen things change in the last year. While markets across the country will experience different trends, 2021 could be a year where Canada’s major real estate markets have more in common with each other than they have differences. Low-interest rates in many ways are the glue that holds many of these trends together, so buyers, sellers, and agents should be closely watching what The Bank of Canada is doing and planning accordingly.

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