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Housing Market 2021: Is it Too Late to Buy a House?
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Canada’s housing market was gravity-defying during the pandemic. The Canada Real Estate Association (CREA) data shows that over the last 12 months, the rise of home prices was more than in the previous four years. Moreover, the rise in prices in more than half-dozen Canadian housing markets was more than in the preceding decade.
According to a May 7, 2021, report by the Canada Mortgage & Housing Corp. (CMHC), the average home price could rise by 14% from 2020. If home sales climb from about 550,000 last year to 602,300 this year, the average price could soar to $649,400. Thus, is it too late to buy a house now because of inflated prices?
Ari Altstedter, Bloomberg News A Sold sign on a front lawn of a home in the York neighborhood of Toronto, Ontario, Canada, on Thursday, March 11, 2021. The buying, selling and building of homes in Canada takes up a larger share of the economy than it does in any other developed country in the world, according to the Bank of International Settlements, and also soaks up a larger share of investment capital than in any of Canadaâs peers. Photographer: Cole Burston/Bloomberg , Bloomberg
(Bloomberg) Activity in Canadaâs residential real estate market will moderate from the âunsustainableâ levels seen so far this year, though sales will remain at an elevated pace and prices will continue to climb for years to come, according to the latest forecast from the national housing agency.
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Housing markets in Canada have defied all predictions of doom and gloom since the onset of the pandemic. Those with a bearish housing market outlook keep pushing the timing of an imminent collapse forward, but their dismal forecasts to date have not materialized.
That raises a question of just when will the housing “bubble” pop? Will it be this year, the next or sometime later? A related question is what would bring about such a reversal in the housing market? Would it be a regulatory change or a market reaction to quickly accelerating housing prices? Another possibility is that an economic downturn in the future brings all markets, including housing, down.