Real Estate Trends - Reflecting On The Best Trends From 2021

We’re almost there. After an especially turbulent 2020 in the Canadian real estate market (to put it mildly), a new year is about to dawn. With that new year will come a fresh set of Canadian real estate trends for investors to study and use to their advantage. There’s no such thing as a uniform set of guidelines for success between housing markets in Canada. That said, experts across the country have taken notice of similarities throughout the nation.

Overall, there’s a sense of optimism and resilience headed into 2021. After the outbreak of COVID-19 and international economic concerns, everyone in the real estate market is ready to bounce back. From the lingering impacts of COVID to a shift in market priorities, we’ve got a breakdown of 2021's most exciting real estate trends.

While these real estate trends were from the 2021 market, they can teach you a lot about what real estate trends we can expect today in 2023, so, if you are ready to explore today's real estate trends, click the link below to book a free strategy call with our team at LendCity.

The suburbs are the place to be in Canada

In years past, real estate trends have shown tenants and homebuyers alike thronged to Canada’s dense urban areas. Now, more people than ever are discovering that the biggest cities in Canada are getting too crowded. Home prices are out of reach for a big chunk of buyers, and apartments are increasingly difficult to come by.

As a result, more people — commercial and residential buyers — are looking toward the suburbs. The result of this migration has been dramatic. The smaller suburban towns surrounding Canada’s major cities have seen tremendous growth over the last year. These real estate trends is expected to continue throughout 2021 as people move and buildings go up.

The big Canadian move

At this point, COVID-19 will continue to impact the housing market throughout 2021, just perhaps not in the way you’d think. While some housing professionals predicted that the pandemic would have a souring impact on the Canadian housing market, the opposite has proved true. As residents were forced to shelter at home, they looked around their home. Several decided to try something different.

Whether they wanted something more remote or something a little more luxurious, the real estate trends unmistakable: Canadians were on the move.

This theme should continue throughout the coming year. Once the expected vaccination is readily available, you should see an uptick in real estate activity throughout the country.

Falling home prices

In May, with economic turmoil surrounding the outbreak of COVID-19, the unemployment level reached 13.7 percent. In the months since that number has dropped considerably. In October alone, more than 370,000 Canadians gained employment. As of November 2020, the unemployment level in Canada hovers around 8.5 percent.

Though the unemployment situation in Canada is improving, it will continue to impact the housing market over the next 12 months. Moody’s Analytics, Inc. predicts, “The housing market will no longer be able to escape the poor condition of the labour market.” The firm expects housing prices to drop nearly 7 percent over the next year.

That downturn might not be music to the ears of a home seller, but the market has never been more accessible to those hoping to start or expand their real estate investment portfolio.

Look to Vancouver

According to John Bunting, one of the co-authors of the annual Emerging Trends in Real Estate survey, the most attractive real estate market in the country in Vancouver.

As Bunting explains, “Vancouver is arguably … a more attractive place to want to live and do business in today than it was before COVID … Our infection rates have been low relative to other places in Canada and certain other countries in the world. The city’s clean, it’s safe, it’s got a good economic environment, stable government, generally. So it’s just a great place to be, and I don’t think that’s going to change.”

While not every real estate sector in Vancouver is bulletproof, the city is seen by investors nationwide as extremely inviting for investors.

Condos more critical than ever

Seven percent seems like a substantial drop in home costs. However, when you’re dealing with a market as vibrant as Canadian real estate, homes may still be inaccessible to a portion of the population, even when prices are deflated.

Housing analysts expect that many Canadians will have trouble saving up enough money for a down payment. The uptick in unemployment mentioned above certainly won’t make matters easier. As a result, the market expectation is that smaller single-family rentals, apartments and condominiums will become increasingly popular over 2021 as Canadian families work to cut costs for a home down payment.

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Cutback on commercial construction

Perhaps the only real estate market that could see a noticeable slowdown through 2021 is commercial real estate development. Based on a survey from Emerging Trends in Real Estate, commercial real estate developers could feel the squeeze as the economy continues to rebuild.

Throughout 2021, you should expect that commercial interests will be focused on getting back to a baseline of success, not expanding. If Canada’s economy continues to recover with regular speed, the commercial real estate outlook could improve (but it’s going to take some time).

Specifically, the retail market is expected to take a substantial hit over the coming months. The pandemic has left a lot of old-fashioned retail operations feeling their age. That goes for more than just shops. It applies to bars and restaurants, as well. As a result, the brick-and-mortar metal real estate market is beginning to dry up.

Residential building on the rise

Regardless of where you live in Canada, residential construction is on the rise. As a housing shortage drags on, new homes and multi-unit buildings are becoming more valuable than ever before. Several cities see the units in their apartment buildings sold or rented before the final nail is driven home.

It’s a very good time to be in the residential construction business. If you have the opportunity to invest in residential construction (and the due diligence checks out), you should certainly take it. Especially if it’s in Vancouver.

Keeping these real estate trends in mind will help you make smart, targeted decisions throughout 2021.

While these real estate trends were from the 2021 market, they can teach you a lot about what real estate trends we can expect today in 2023, so, if you are ready to explore today's real estate trends, click the link below to book a free strategy call with our team at LendCity.