Canada
Home prices continued to rise in the third quarter of 2021, but at a significantly slower pace than we saw earlier in the year. According to the recent Royal LePage House Price Survey, 68% of regions studied posted quarter-over-quarter gains of less than 2% in Q3, compared to just 14.5% of regions in the second quarter. As the weather warmed, Canadians turned their focus to other things, especially as increased vaccination rates led to a reduction in pandemic health restrictions.
“During the third quarter, the torrid pace of home price appreciation moderated as both demand and inventory waned, a typical summer market trend in a very atypical year. With easing pandemic restrictions, there was finally something to talk about other than real estate, and people began travelling and socializing again,” said Phil Soper, president and CEO of Royal LePage. “In addition, a year of relentless competition for too few properties drove some would-be purchasers to the sidelines as buyer fatigue set in.”
While the rate of appreciation may be slowing, prices continued to increase as a result of a chronic shortage of housing stock right across the country. Nationally, the aggregate price of a home increased 21.4% year-over-year to $749,800 in the third quarter of 2021. When broken out by housing type, the national median price of a single-family detached home rose 25.2% year-over-year to $790,000, while the median price of a condominium increased 13% to $533,600 during the same period.
Third quarter press release highlights:
- Royal LePage maintains its 2021 forecast, with the national aggregate home price expected to rise 16% in Q4, compared to a very strong Q4 2020.
- Very low inventory pushes potential buyers to sidelines amid national housing supply crisis, resulting in pent-up demand.
- Condominiums continue price rebound in urban centres as return to ‘new normal’ allows Canadians to enjoy more aspects of city life.
Ottawa
The aggregate price of a home in Ottawa increased 20.7% year-over-year to $725,200 in the third quarter of 2021. Broken out by housing type, the median price of a single-family detached home increased 23.0% to $856,900, while the median price of a condominium increased 11.3% to $414,700 during the same period.
“We’ve seen a gradual yet steady decline in active listings over the last six years, and that lack of inventory remains the greatest challenge for buyers today,” said John Rogan, broker of record, Royal LePage Performance Realty. “Even if demand returned to historic levels, there would still not be enough housing supply to meet that demand.”
Rogan noted that while Ottawa remains firmly in a seller’s market, the usual summer slowdown did occur in the early half of the third quarter.
“Compared to the spring, there are fewer multiple-offer scenarios today, but they have not been eliminated entirely. Much of the demand is coming from first-time buyers looking for larger properties with adequate space to continue working from home long-term,” said Rogan. “I expect the final months of 2021 will look very similar to the third quarter. Sales should continue to moderate, and price appreciation will persist.”
Royal LePage is forecasting that the aggregate price of a home in Ottawa will increase 17% in the fourth quarter of 2021, compared to the same quarter last year. This forecast is consistent with the company’s previous update in July, 2021.
Forecast Chart
https://marketing.rlpnetwork.com/Communications/Royal_LePage_2021_Market_Survey_Forecast_Q3.pdf
Data Chart
https://marketing.rlpnetwork.com/Communications/Royal_LePage_National_House_Price_Composite_in_the_Third_Quarter_2021.pdf
Sources:
https://blog.royallepage.ca/canadas-aggregate-home-price-increased-21-4-year-over-year-while-slowed-third-quarter-growth-offered-hope-to-buyers/?utm_medium=email&utm_source=rlpre&utm_content=Just+released%3A+Royal+LePage%27s+Q3+2021+House+Price+Update+and+Market+Forecast&utm_campaign=RLP+news%2C+info+on+Teams%2C+rlpSPHERE%2C+Training
https://www.royallepage.ca/en/realestate/news/royal-lepage-canadian-home-prices-soar-as-persistent-supply-shortage-results-in-continued-sellers-market/
