{"id":6742,"date":"2021-01-14T23:56:36","date_gmt":"2021-01-14T23:56:36","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2021\/01\/14\/pandemic-housing-market-to-stay-hot-in-2021-but-economists-expect-a-hangover-later-in-the-year\/"},"modified":"2021-01-14T23:56:36","modified_gmt":"2021-01-14T23:56:36","slug":"pandemic-housing-market-to-stay-hot-in-2021-but-economists-expect-a-hangover-later-in-the-year","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2021\/01\/14\/pandemic-housing-market-to-stay-hot-in-2021-but-economists-expect-a-hangover-later-in-the-year\/","title":{"rendered":"Pandemic housing market to stay hot in 2021, but economists expect a hangover later in the year"},"content":{"rendered":"
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It\u2019s been very strong, and that strength can\u2019t be sustained forever<\/p>\n

Stephen Brown, Capital Economics<\/p>\n<\/blockquote>\n

Yet those trends won\u2019t last forever. Cities such as Halifax and Montreal have absorbed the effects of lower mortgage rates quickly, Brown said, and others such as Toronto and Vancouver are still dealing with weaker immigration levels, which weigh on rents and investor interest.\u00a0<\/span><\/p>\n

\u201cIt\u2019s been very strong, and that strength can\u2019t be sustained forever,\u201d Brown said. \u201cSo, the housing market will start to lose some momentum for that reason.\u201d\u00a0<\/span><\/p>\n

The economics unit at Bank of Montreal said it sees housing sales cooling nationally, but home prices being supported by the lack of supply and still-low interest rates.<\/span><\/p>\n

BMO\u2019s economists forecast the MLS Home Price Index would increase seven per cent this year, \u201cwith the first half of the year still characterized by outsized strength in single-detached homes, especially in smaller markets, partly offset by sluggish condo prices,\u201d they wrote.\u00a0<\/span><\/p>\n

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A lot of demand is being pulled forward due to low rates and distorted buyer psychology<\/p>\n

Shaun Hildebrand, Urbanation<\/p>\n

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\u201cWhether or not that rotation persists after the vaccine is widely administered is probably a question for the 2022 outlook, but we suspect core urban markets will ultimately find a solid footing again after further underperformance in the meantime,\u201d they added in their Dec. 23 outlook.<\/span><\/p>\n

Downtown Toronto condo sales actually rose in December to their highest level since May 2019, increasing by 26 per cent month-over-month and 102 per cent year-over-year, according to Shaun Hildebrand, president of research firm Urbanation Inc.<\/p>\n

Yet for the Greater Toronto Area housing market more broadly, Urbanation also sees a slowdown coming later this year.<\/p>\n

\u201cA lot of demand is being pulled forward due to low rates and distorted buyer psychology as many that weren\u2019t planning on moving are now wanting a change and others think they need to get into the market now before it\u2019s \u2018too late,’\u201d Hildebrand said in an email. \u201cAn eventual recovery in the economy and immigration will be important for the market as vaccines are introduced \u2014 but they will have a lagged effect and we could be dealing with a bit of a hangover later this year, specifically for (Toronto\u2019s suburban) houses.\u201d<\/p>\n

\u2022 Email: gzochodne@postmedia.com<\/a> | Twitter: GeoffZochodne<\/a><\/em><\/p>\n<\/div>\n