Multicultural, bilingual, West-Coast beaches, rocky mountains, ice hockey, bustling metropolitan cities coupled with serene provincial towns, deep pool of immigrants, pancakes and maple syrup, mooses and polar bears, impressive skyline condos, Justin Bieber…… okay, you already know I am talking about no other country than Canada; what’s not to love about it? The country is worth all the hype, and the fiery real estate market is not all smoke either. Here are ten facts you probably do not know about Canada’s real estate market.
There is More Demand Than Supply
This should come as no surprise at all. Canada is one of the most sought out places to live globally. Being one of the most prosperous countries globally as far as immigration is concerned, the demand for housing has risen significantly. This is mainly due to immigrants’ influx, causing skyrocketing house prices. Have you ever heard of house hoarding? Over the past few months, homeowners in Canada have been holding back from putting up their homes for sale. This has resulted in very low house listings and an increase in interested buyers. Home hoarding is expected in a market where home ownership is a war won by the highest bidder. It is like the moment you realize you could be a multi-millionaire because of your property; you want to be sure to get the most value for your property. I mean, who wouldn’t?
Prices Will Keep Rising
Somebody had to say it, because well, It’s the cold truth. Statistics predict a continuous and steady increase in the average price of properties in Canada in the coming decade. According to the 2022 Royal LePage Market Survey, the average price of a single-family detached home in Canada is expected to rise by 11% to $918,000 in 2022, while condominium prices are projected to grow by 8% to $594,000.
It is expected that Toronto and Vancouver will see the most significant increase in sale prices. RE/MAX predicted a 10% Increase in sale prices for properties in Toronto and a 5.5% percent increase in Vancouver. In 2022, Condos in Toronto would lead growth in Canada’s Real Estate Market with a predicted 12% increase in average sale prices —according to a study by Royal Lepage. The table below shows the estimated 2022 aggregate home prices of resale and new builds In Canada.
|Housing Market Forecast Prices by the End of 2022
Source: Royal Lepage
Canada’s Real Estate Market Defy the Pandemic
At the start of the COVID-19 pandemic in 2020, numerous real estate forecasts predicted a fall in housing sales and prices. However, the unexpected happened. High sales and prices were recorded, and the demand for properties in Canada increased. Factors responsible for these results include the increasing number of work-at-homes and school-at-homes, further raising the demand and value bar of real estate in Canada. Another factor was the availability of virtual home hunting, providing an easy avenue for buyers to search, bid, and close sales on a property right from the comfort of their homes.
According to a recent report by the British Columbia Real Estate Association (BCREA), British Columbia saw an increase in sales by 58% by December 2020 over the same month of 2019. Edmonton also recorded a 26% increase in detached home sales by December 2020 compared to prices in December 2019 — stated by the same report. The facts show the resilience of Canada’s Real Estate Market to any attempts by gravity or COVID to pull it down. This is one of the top reasons people choose to invest in Canada’s Real Estate Market, the stability of the consistent growth and increase in value is unmatched.
Sold Over Asking is The New Sold in Ontario.
Did you catch on the news of the three-bedroom house at 194 Scarborough Road that was listed for $1,299,900? Well, Daily Hive Toronto reported it sold on the same day it was listed for a jaw-dropping $1,860,000 — that is $560,100 over asking! Wow! You could take that $560,100 and buy yourself a condo. With home prices skyrocketing and bidding wars getting dirty, home buyers are paying hundreds of thousands of dollars over listing price to secure a home.
Zoocasa, in a recent study, analyzed the differences between the average initial list price and final sold prices in 29 Cities in Ontario. The statistics showed in Ottawa alone that buyers could expect to pay 27.8% over the list price of houses. That is a rise from $523,842 to $669,874. In Whitby, homes sell for an average final sold price of $1,092,945 from an initial asking price of $938, 831; a 14.5% increase. Windsor saw a 16.3% increase with a final sold price of $453,210 from the initial list price of $389,658. This is the reality of the real estate market in Ontario, especially in the Greater Toronto Area, where most people live and work.
Investing In Canada’s Real Estate Earns You Fast Income
Gaining from home equity is a long process in many countries. However, there is a month-to-month increase in Canada’s Real Estate Market value. You could even sell your rights to a pre-construction unit you just bought and still make a profit, all before the building is completed. The aggressive increase in value of Canada’s real estate is primarily due to Canada’s growing economy with a low unemployment rate, low crime rate, various top universities, and a stable demand for rental housing. Rapid property value appreciation is now a norm in major cities like Toronto and Vancouver and all over Canada. Canada is a productive land of opportunities for investors to make a quick profit from real estate.
Residential Real Estate is Worth Over $6.1 Trillion, Over 3x GDP
Canada’s economy is mainly dependent on residential real estate. The 2020 report by Statistics Canada (Stan Can) shows residential property value increased by billions in 2020. In the same year, the national assessment value was $6.1 trillion. That is a 2.5% increase from the previous year. The value of the residential real estate in Canada is at 300% of the gross domestic product (GDP) of the country. However, the United States residential real estate was valued at only 170% of its gross domestic product in 2020.
When it comes to real estate, Canada has moved to stay. There are just two things: Canada, and then there is real estate. Canada can not be exempted from the conversation wherever real estate is discussed globally. Doing that is like taking the word ‘real’ from real estate. Canada is real estate, and real estate is Canada. If at this point you are still indecisive about investing in Canada’s real estate, chances are you are overthinking it — hop in already.
First Time Home Buyers Have it Easy
As a first-time homebuyer, Canada offers financial assistance to help you with your down payment. This initiative is incredibly relieving since first-time homebuyers do not have equity privileges from an existing property. From 2019, first-time homebuyers in Canada are offered down payment help called the First-Time Home Buyer Incentive (FTHBI). This is a loan from Canada’s government allowing first-time homebuyers to withdraw up to $35,000 in a calendar year from their Registered Retirement Savings Plan (RRSP).
The complete repayment of this loan is due in 15 years. To put the icing on the cake, you could also benefit from this incentive if you have not bought a property in the past five years. Other incentives include the $5000 Home Buyers’ Amount, the GST/HST New Housing Rebate, and the Land Transfer Tax Refund for those in Ontario, British Columbia, and Prince Edward Island.
Not in Canada? You Can Still Buy Real Estate.
Canada has an excellent long-standing relationship with foreign investors. The conditions for foreign real estate investors in Canada are favorable. Canada does not require residency of foreign housing market investors. You can own a home in Canada even if you don’t live there, well, at least for now. Recent news reports show that the Canadian government may ban foreign investors from buying non-recreational real estate as an initiative to increase housing affordability for Canadians. Well, that has not happened yet. Besides, you can tap into commercial, industrial, or recreational properties that you can lease out.
Condominiums are The New Detached
Canada is the world’s second-largest country by landmass, yet there is very little or no space to build more houses, further raising the demand curve in the real estate market. Canadians long-cherished dream of a detached home with a garden or yard is soon to be unattainable, especially in the urban metropolis where people want to live. This has caused many to embrace condominiums as the new definition of a home. More Canadians are adapting to living in high-rise condominiums within a community. Factors such as availability and affordability make condominiums an irresistible property to own in Canada. A recent report by RE/MAX Canada showed that buyers turned to condominiums in 2021.
The Greater Toronto Area saw a 71% increase in Condo sales, while Halifax-Dartmouth had a 36% increase and Ottawa’s 29% increase. With more people moving to live in urban cities close to their place of work, condos sale will continue to increase. A report by TD Canada Trust’s Condo poll found that 60% of Canada’s who already own a condo said they would still buy another condo if they had the money. It’s very clear from the statistics above that Canadians now prefer condominiums to single detached homes, and it’s not just because of affordability. It’s no wonder then that condominiums and sky-high cranes are a famous sight in the country. In fact, you can not create an artistic impression of what Canada looks like without adding drawing up the condominiums; you would be wrong.
You Get The Best Home Owner Loan Advantages in Canada’s Real Estate Market
There are many loan advantages in Canada’s Real Estate Market. A few of the benefits include but are not limited to:
- Home Equity: This refers to the difference between the value of your home and how much mortgage you owe. You can take a loan that is secured against your home equity.
- Second Mortgage: This allows you to borrow up to 80% of the appraised value of your home after subtraction of the balance of your first mortgage.
- Home Equity Line of Credit (HELOC): This is a line of credit secured against your home with a fixed credit limit. You can borrow money, pay it back, and borrow again.
- Reverse Mortgage: This gives you the privilege to borrow up to 55% of the value of your home. But you have to be 55 to qualify.
Of course, many other loan opportunities are not mentioned here; you have to make the down payment and open the flood gates of loans available to you.
Well, perhaps you already know some of these facts about Canada’s real estate market, or maybe not. However, you would agree that the facts mentioned above about the real estate market in Canada have impacted your perceptions in one way or the other. Contrary to popular opinion that the market is overhyped, statistics show otherwise. The COVID-19 pandemic did not diminish Canada’s insatiable real estate demand, a fact that will not change in the future. You may want to have at least half the price of the value of the home you want to buy in major cities like Toronto and Vancouver as more houses are sold over asking.
One of the critical benefits of buying real estate in Canada is that it appreciates very quickly. With Canada’s real estate now worth more than its Gross domestic product (GDP), now is a good time to invest, and time is of the essence. Affordability and personal preferences have raised the demand curve for condominiums, indicating this type of housing Is sure to see more growth in the coming years. Whether you are a first-time homebuyer or not, you can be assured of the most attractive loan incentives, making your dream of homeownership a fast-paced reality.