TORONTO—The latest Ontario Housing Economic Analysis 2021-2022 by Central 1 regional economist Edgard Navarrete suggests Ontario’s resale home market is set to remain hot for the remainder of 2021, driven by sustained demand and limited supply.
Navarrete predicts 2022 will see a slight slow-down in activity as new buyers are priced out and potential sellers remain on the sidelines due to the uncertainty of finding a replacement home in such a crowded market, stated a recent release.
The report suggests that home sales, new home construction and prices will all continue to rise in 2021, before growth declines slightly in each area next year, as the market is impacted by increased interest rates and subsequent upward implications on mortgage rates.
The report forecasts that average home prices will climb 19.2 per cent to $846,000 in 2021, increasing by 7.2 per cent in 2022 to $907,000.
Home sales are expected to increase 20.6 per cent in 2021, before sliding 1.2 per cent by 2022, while housing starts should climb 18.2 per cent in 2021, declining 9.3 per cent in 2022.
Navarrete believes the rental vacancy rate will slide modestly to 3.1 per cent in 2021 as demand rebounds. He thinks the average rent price will increase by 4.0 per cent in 2021, climbing a further 6.0 in 2022.