House prices went up by 8.57 percent last year
Even with the dire economic situation that the pandemic brought, Canada’s real estate marketplace carried on its climb. House prices in the 11 biggest cities in Canada climbed by 8.57 percent last year, which contrasts the fall of 0.29% in 2019. Quarter-wise, house prices rose 2.43% in the last quarter of 2020.
Sales surging, construction activity picking up
The Canadian Real Estate Association (CREA) revealed that demand in Canada is strong, with sales rising by 47.2 percent in December last year, compared to the year before. This actually makes for the largest year-on-year growth in eleven years! During the duration of last year, home sales climbed to a new record level of 551,392 units, a jump of 12.6 percent from a year before and 2.3 percent over the previous record achieved in 2016.
In 2020, housing starts increased by 4.4 percent year over year to 217,802 units, while completions increased by 6.1 percent to 198,636 units.
To curb speculative purchasing, the central bank undertook a number of steps in recent years, including increasing mortgage down payment thresholds and shortening amortization timeframes. As a result, house price growth slowed dramatically in 2018 and 2019. Despite the coronavirus spread, the housing marketplace has recovered as the influence of these restrictions has faded.
Rents, rental profits: moderate profits, 4-6%
The average cost of an apartment in Toronto is $9,409 per square meter.
Due to the pandemic, Canada’s economy shrank by about 5.1 percent in 2020. This was partly due to spending and business activities coming to a stop.
The International Monetary Fund (IMF) recently lowered its growth forecast for Canada for this year. They changed their forecast from 5.2 percent to 3.6 percent. The fund cited new restrictions imposed as a result of an infection outbreak. Nonetheless, the Bank of Canada remains upbeat. It forecasted growth year-round of about 4 percent this year and near to 5 percent during the next.
After cutting it 3 times in March last year, the Bank of Canada stuck to its main rate at 0.25 percent in January 2021.