CREA's revised home price forecast for 2021 is an increase of more than 3% from its original prediction. This revision is largely due to the extraordinary demand generated in early 2021, causing a surge in housing prices that has continued into the summer. While prices vary by region, buyers can expect a 19% increase in prices across the board, from Vancouver to Halifax, and every city in between.
This increase in home prices is not entirely unexpected; there are several factors driving the market's momentum. Population and job growth, low-interest rates, and limited housing supply are primary drivers of the current surge in real estate activity. Additionally, the COVID-19 pandemic has contributed to increased housing demand, as homeowners look for more space and greater flexibility for work and remote learning.
Despite the good news for real estate sellers, it's important to note that housing activity is still cooling in most regions across Canada. In May, home resales dropped by 7%, a trend that is expected to continue in the coming months. This cooling of activity is not unique to Canada, as many markets worldwide are experiencing the same trend. Still, with CREA's revised home price increase, sellers can remain optimistic that there is still plenty of movement in the market, and that they can capitalize on potential opportunities to sell their home.
For buyers, the increased home price forecast may pose challenges. With prices rising, buyers may struggle to find affordable housing options, and may need to adjust their expectations or seek out alternative financing options. However, the low-interest rates currently available may still make homeownership a viable option for many.
One factor to watch in the coming months is how the Canadian government will respond to the hot housing market. It may introduce new policies, such as a foreign homebuyer tax, to slow down excessive price growth. On the other hand, if there are no significant policy changes, the Canadian real estate market may continue its upward trajectory.
The revisions in CREA's home price forecast could also change how people approach home financing. With rising prices, homebuyers may need to be more creative and consider different home financing options, like a Crea Faucet or other innovative offerings. Regardless of the financial strategy, it's likely that many Canadian homebuyers will need to be strategic and flexible in their approach to purchase the right property at the right price.
In conclusion, the Canadian real estate market is experiencing a significant shift, with CREA revising its home price forecast higher for 2021, despite a cooling trend in most regions. Homebuyers and sellers will need to stay flexible and informed to capitalize on opportunities and navigate the challenges of the current real estate landscape. Nevertheless, there is still optimism and hope for both sides of the market, with the potential for homebuyers to find the right property and for sellers to receive strong returns on their investment.