This year will be remembered for many reasons, and optimism is one thing that’s been in short supply since the spring. We’re experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons:

1 The Economy Is Expected to Continue Improving

Following a record contraction of the Canadian economy in the first half of 2020, the third quarter saw a vigorous rebound in economic growth. Real GDP grew 8.9 per cent, or 40.5 per cent on an annualized basis, bringing the economy back to within 4 per cent of its pre-COVID-19 level. The distressing second wave of COVID-19 and the restrictions it has necessitated have jeopardized the recovery that’s currently underway.

However, we still expect the economy to post positive real GDP growth in the fourth quarter of 2020, though there is the risk that a renewed fear of public spaces combined with targeted restrictions will prompt a modest retracing of output.

The ultimate economic impact of COVID-19 by the end of 2020 will be a Canadian economy that is about 2 per cent smaller by year-end. That said, promising results from vaccine trials should lead to very strong growth in 2021 as pent-up spending floods back into the economy. We expect Canadian real GDP will grow by an average of 4 per cent over the next two years.                                            

Courtesy: BCREA Economics

2  Interest Rates Are Projected to Stay Low

Along with a massive expansion of its balance sheet to facilitate QE, the Bank of Canada has also reaffirmed its plans to keep its overnight policy rate at 0.25 per cent until it sees slack in the Canadian economy fully absorbed. Given current forecasts for economic growth, that may not occur until 2023, meaning these low rates will be around for quite some time. There are, however, other factors in the economy and financial markets that may push mortgage rates marginally higher over the next year.

3  Future Home Sales Are Forecasted to Grow

Canadian real estate brokerage Royal LePage expects home prices to rise 5.5 per cent in 2021, building on unexpectedly strong growth this year, driven by a shortage of properties for sale and record low interest rates.

"The upward pressure on home prices will continue," supported by lack of supply to meet surging demand and policy makers promise to keep interest rates at record low, Royal LePage chief executive Phil Soper said.

The average Canadian home price rose more than 15 per cent in October from a year earlier to an all-time high, according to the Canadian Real Estate Association.

Royal LePage expects the shift to larger homes, which has driven a surge in sales and prices of single-family houses this year, will moderate as "life returns to normal," easing some of the pressure on condo markets.

Bottom Line

Experts forecast that buyers and sellers are going to be active in 2021. If you’ve thought about buying or selling your home this year but have held off, now may be the time to take advantage of this market. Reach out to a local real estate expert to take the first step toward your new home today.

Good news continues to arrive, albeit in bits & pieces, concerning Strata Insurance rates in our province. 

The B.C. Financial Services Authority is the regulator responsible for the private sector insurance industry in British Columbia.

At the direction of the Minister of Finance, BCFSA released its interim report on the rising cost of strata insurance in British Columbia on June 16, 2020.  This report found that premiums have risen by approximately 40 per cent throughout the province on a year-over-year basis, with deductibles experiencing up to triple-digit increases over the same period.  The Province introduced amendments to B.C.’s Financial Institutions Act and the Strata Property Act to help address the cost and availability of strata insurance in B.C.

You can read more HERE.

Around this time each year, many homeowners decide to wait until after the holidays to sell their houses. Similarly, others who already have their homes on the market remove their listings until the spring. Let’s unpack the top reasons why selling your house now, or keeping it on the market this season, is the best choice you can make. This year, buyers want to purchase homes for the holidays, and your house might be the perfect match.

Here are seven great reasons not to wait to sell your house this holiday season:

1. Buyers are active now. Mortgage rates are historically low, providing motivation for those who are ready to get more for their money over the life of their home loan.

2. Purchasers who look for homes during the holidays are serious ones, and they’re ready to buy.

3. You can restrict the showings in your house to days and times that are most convenient for you, or even select virtual options. You’ll remain in control, especially in today’s sellers’ market.

4. Homes decorated for the holidays appeal to many buyers.

5. Today, there’s minimal competition for you as a seller. There just aren’t enough houses on the market to satisfy buyer demand, meaning sellers are in the driver’s seat. Over the past year, inventory has declined to record lows, making it the opportune time to sell your house.

6. The desire to own a home doesn’t stop during the holidays. Buyers who have been searching throughout the fall and have been running into more and more bidding wars are still on the lookout. Your home may be the answer.

7. This season is the sweet spot for sellers, and the number of listings will increase after the holidays. In many parts of the country, more new construction will also be available for sale in 2021, which will lessen the demand for your house next year.

Bottom Line

More than ever, this may be the year it makes the most sense to list your house during the holiday season. Reach out to a local real estate professional to determine if selling now is your best move.