As we enter into the last quarter of 2019, the Canadian real estate industry is holding quite tight. Stakeholders in this industry, however, have something to worry about even as projections into the 2020 real estate market in the country is showing unfavorable signs. According to evaluations conducted by the Canadian Real Estate Association, there is expected a significant drop in demand and supply for real estate properties.
Expectations from the Canadian Real Estate Association show that 2020 will be a relatively slow year as a result of the inherited destabilizations in the industry that were experienced in 2019. This year, home sales have pulled back by up to 1.6 percent, leading to about $450,400 per unit in sale prices. With the current market performance in the real estate industry the weakest ever for the last decade, 2020 may fail to deliver on its expectations as far as stabilizing the industry is concerned.
Experts anticipate that prices will move up by only 0.8 percent, from $450,400 to around just over $490,800. Not all cities in the country, however, will experience uniform price gains in 2020. Improvements are expected in strategic cities in Canada, including Quebec, Alberta, and Ontario.
According to industry experts, the anticipated slowdown in the Canadian real estate industry will be further extended in the subsequent years. 2021 will show equal weaknesses as the industry will only stabilize later beyond 2022.
Weaknesses in the real estate sector in the country have been traced to the struggling oil industry, according to the Moody’s report prediction. The shortcomings that have been evident in the Prairies, including Regina and Saskatoon, will be a major factor in causing the slump in the Canadian real estate industry. Declines are also expected in additional cities in other parts of the country whose economy is greatly tied to that of the oil-production cities.
Experts believe that the current slowdown and the expected poor performance in the real estate industry is much more promising as compared to the 2017 projection that had predicted a worse scenario than it is currently. In 2017, it was believed that the Canadian real estate prices were to fall by 20 percent by 2020. Although drops have been coming by across the years as we enter into 2020, a huge drop has been prevented by governmental and stakeholder-initiated mitigations, including economic incentives.