If you're planning on buying a house in the next two years, we hope you've been saving a lot. The average house price in Canada is expected to rise to its highest amount since 2017. That means it could be even harder to buy a house in some of Canada's more expensive real estate markets.
The new 2020 Housing Market Outlook released by Canada Mortgage and Housing Corporation (CMHC) shows that it's going to get more costly to buy a home in the next few years.
CMCH forecasts that price growth is expected to start again in 2020 and 2021. That will take the average price of a house even higher than it was back in 2017.
"Housing starts are projected to stabilize in 2020 and 2021 at levels in line with long-run averages. This follows two years of declines from elevated levels in 2017. Resale activity and house prices are expected to fully recover from recent declines," said Bob Dugan, CMHC's chief economist, in the outlook.
According to the CMHC outlook, the national average price of houses being sold on MLS in 2017 was $511,830. But when that figure is broken into average prices in each province, average prices were much higher in Ontario and B.C. while provinces like Saskatchewan saw lower average prices.
So the national average evens out the high prices in Ontario and B.C. thanks to lower prices in other provinces.
For 2019, the average house price is expected to decline for a second straight year since the highs seen in 2017 but then prices will rise.
CMHC predicts that Ontario will be the leading province when it comes to price increases in 2020 and 2021 followed by Quebec and B.C.
"Other regions will generally see modest gains over the forecast horizon in comparison to Ontario, Quebec and British Columbia," the study stated.
Back in 2017, the cost of buying a house was all over the place and reached extreme highs in some parts of Canada.
According to the Financial Post, "in Toronto alone, nominal housing prices dropped by 19 per cent in July 2017 from a high of $918,138 in April 2017. Sales volume declined by 49 per cent over the same period."
As pricier markets continue to get even more pricey, the national average when it comes to the prices houses are listed at is expected to rise as well.
CMHC forecasts that income and population growth will support an increase and rebound in both home sales and prices.
In 2020, the average house price is expected to rise and could range anywhere from $506,200 to $531,000.
Then in 2021, that average is expected to rise again and could be anywhere from $539,800 all the way to $569,600.
CMHC's Canadian housing market forecast also highlights that sales will increase in both 2020 and 2021, which have been on a decline since 2016. This is believed to be a reflection of increasing growth of household disposable income.
The dream of being a homeowner might be looking a little hazier after that news. Better start saving up now!