shared a chart<\/a> that showcased the latest sales-to-new listings ratio from Toronto, Vancouver and Calgary, showing the markets all comfortably in seller\u2019s territory. To drive the point home, the economist titled the chart \u201cSellers are in full control of Canada\u2019s housing markets.\u201d<\/p>\nMeantime, Hogue noted that demand-supply conditions are \u201cexceedingly tight\u201d in Ottawa and Montreal, with prices continuing to rise quickly in December.<\/p>\n
While some forecasters appeared certain earlier in 2020 that Canadian home prices would eventually suffer price declines amid persistently high unemployment and a slow economic recovery, there\u2019s little sign that falling prices are imminent in 2021.<\/p>\n
This week Capital Economics\u2019 Stephen Brown predicted that home prices would continue to climb through 2021.<\/p>\n
\u201cThe wide range of forecasts for house prices in 2021 shows that there is still a lot of uncertainty ahead. Nevertheless, given strong demand and low mortgage rates, our view is that prices will continue to rise,\u201d he wrote.<\/p>\n
Brown pointed to two reasons why analysts were forecasting price declines for Canada\u2019s housing market. First, those with pessimistic views of the country\u2019s economic recovery amid a second wave of the pandemic believe there\u2019s a housing supply spike looming as homeowners, no longer able to defer their mortgage any longer, are forced to sell.<\/p>\n
Second is the group that has a more optimistic view, believing that mortgage rates will rise on the back of strong economic recovery. With higher mortgage rates, demand will slow as affordability suffers and buyers are less motivated to enter the market.<\/p>\n
Neither scenario is likely to negatively impact prices though, wrote Brown. According to Canadian bank regulatory filings from the fall, only 70,000 mortgages with the country\u2019s big banks are currently in deferral, down significantly from the spring.<\/p>\n
Mortgage rates are expected to sit at rock bottom levels through 2021, as many economists anticipate that the Bank of Canada won\u2019t increase its mortgage-market influencing key interest rate until 2023.<\/p>\n
Brown is predicting Canadian home prices to rise by five percent in 2021 and two percent in 2022.<\/p>\n
![\"canada](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2021\/01\/canada-housing-market.jpg\")
<\/a>Photo:\u00a0Tobias<\/a>\u00a0\/\u00a0Unsplash<\/a><\/em><\/p>\n