According to the Royal LePage Market Survey Forecast, Canadian home prices are expected to see healthy appreciation by the end of 2020, driven by low single-digit appreciation in both the condominium and detached home segments. The decline in high price appreciation in the condominium segment, in recent years, reflects a shift in millennial demand towards houses and is expected to reinvigorate sales activity in the suburbs. 

 The positive outlook for Canadian real estate in 2020 is based on   healthy buyer demand. A segment of potential homeowners that   once put home purchasing on hold beginning in January 2018, due   to the introduction of the mortgage stress test, started returning to   the market in the second half of 2019, driving competition and   demand.  Price data, which includes both resale and new build, is   provided by Royal LePage’s sister company RPS Real Property   Solutions, a leading Canadian valuation company.

Another significant driver in demand is Canada’s healthy immigration rate. According to the Royal LePage Newcomer Survey released in October 2019, newcomers to Canada are expected to purchase one in every five homes on the market over the next five years. Newcomers have high consumer confidence in Canadian real estate (86%) and arrive with savings to put towards the purchase of a home (75%).
“Our 2020 national forecast is based on a continuation of healthy economic conditions,” said Phil Soper, president and CEO, Royal LePage. “Paradoxically, a slowdown in economic growth could cause us to revise the outlook upward. While one month does not a trend make, November’s surprisingly weak employment numbers may be the trigger that causes the Bank of Canada to join the U.S. Federal Reserve in lowering interest rates.

“Falling rates normally encourage new housing demand,” Soper continued. “This would mean further upward price pressure in regions where employment remains healthy, which is most of the country. That window to lower or flat home prices is closing or has closed for most Canadians.”
Tight market conditions influenced by low supply and a growing population continue to affect home prices in the Toronto core and the Greater Toronto Area. The aggregate price of a home in the Greater Toronto Area is forecast to increase 4.75 per cent year-over-year in 2020, rising to $883,700. The median price of a condominium is expected to increase 6.0 per cent year-over-year to $600,000 and the median price for a two-storey detached home is forecast to rise 4.5 per cent year-over-year to $1,027,200 by the end of next year.
The First-Time Home Buyer Incentive may benefit single first-time condominium buyers, especially in the greater region.