A new RBC Economics report says Canada’s housing market is headed for another record year in 2021. After my analysis of TRREB’s monthly sales report for December 2020, this forecast from the Royal Bank of Canada adds a national view, and below I explain what it meant for buyers and sellers in the GTA.
This post was first published on January 13, 2021. The forecasts below are from that report.
What the RBC Economics report said
The bank titled its report “Canada’s housing market headed for another record year in 2021”. The report outlined these salient points:
- We expect solid price momentum to be sustained in 2021 with a nationwide gain of 8.4%
- Price trends to stay firm in most regions of the country
- Low available supply is the main reason property values will continue to go up
- We project home resales to be the strongest ever in Canada in 2021, reaching 588,300 units
- Some moderation will set in over the course of the year, however, in part due to supply constraints
You can read the full RBC report on the 2021 housing market on the bank’s website, or open it below:
Why supply was the key issue
The RBC Economics report pointed to low supply as the main reason values would keep rising. This idea is simple, but it matters. When more people want homes than there are homes for sale, buyers compete, and prices go up.
The same forces showed up locally. In the GTA, multiple offers had become common, and many listings sold within days. I explain the basics in my post on how supply and demand set home prices.
Notably, the report also expected some moderation later in the year. In other words, even a strong market cannot keep speeding up forever, because a shortage of homes eventually limits how many sales can happen.
How the forecast fit with GTA sales data
The national outlook matched what we were seeing on the ground. My December 2020 housing sales analysis showed strong gains in both home sales and prices across the Toronto region. The RBC Economics report suggested that momentum would carry into the new year.
Later reports bore this out for a while. For example, my review of TRREB’s February 2021 figures showed another sharp jump in sales. Of course, conditions have changed a great deal since then, including interest rates, so treat this as a record of that time.
What buyers and sellers could take from it
For buyers, a forecast of rising prices can create pressure to act quickly. However, the smartest move is still to buy within a budget you are comfortable with. Get pre-approved, know your limits and do not let fear of missing out push you past them.
For sellers, a strong market is a chance to get good value. Still, preparation matters. A clean, well-presented home that is priced close to market value tends to attract the most serious buyers.
For homeowners who were not planning to move, the report was a reminder that home equity can grow over time. That equity can support future plans, such as moving up to a larger home or helping a family member buy their first place.
Reading an RBC Economics report with care
Forecasts are useful, but they are not guarantees. Economists build them on the data they have at the time. Then events can change the picture quickly. That is why I like to compare any RBC Economics report with local sales numbers each month. National figures can hide big local gaps, so a GTA buyer should look at GTA data first.
Meanwhile, please take care of yourselves and follow the safety precautions from health care professionals.
Talk to a Mississauga real estate agent
Do you have questions about how market forecasts affect your own plans? I am happy to talk them through. Please send me a note through my contact page or call me at 416 908 5600. A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage. If you found this helpful, I would appreciate a Google Review.
Disclaimer: this article was published on 18 January 2025 and reflects the information available at that time. Interest rates, prices, and government programs change, so check the current position before acting on anything here. It is provided for information only and is not financial, mortgage, tax or legal advice. A. Q. Mufti is a registered Sales Representative with RE/MAX Real Estate Centre Inc., Brokerage, Ontario, Canada.
