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Immigration will play huge role in housing recovery Bow Valley Crag & Canyon - July 22, 2020·06:20am
New listings increase, based on recent activity, Royal LePage says inventory will rise, relieving upward pressure on home prices that characterized the second quarter of 2020 in some Canadian markets."Uncertainty clouds Canada's real estate outlook as a lengthy recovery. The negative impact on home prices should be muted by the balanced nature of Canadian housing, as housing supply shortages offset dampened medium-term demand," says a Royal LePage report.
Royal LePage forecasts national aggregate prices to end 2020 up 2.3 percent in the fourth quarter compared to the same period in 2019.
In Calgary, the company sees a 1.5 percent decline by year's end, from $470,066 to $463,000.
A factor that will weigh heavily on recovery is immigration levels.
"Immigration has been disrupted by pandemic travel restrictions, with the impact to real estate markets varying across regions and housing segments. Royal LePage's 2019 Newcomer study showed that upon arriving in Canada, only 15 percent of newcomers purchase their first home. The average time period after which newcomers will purchase a property is three years after arriving in Canada," says Phil Soper, president and CEO of Royal LePage. "Our research shows that many of the newcomers to our nation who intended to buy a home this year have already been living in Canada for three or more years. A short-term drop in the number of new immigrants and international students will not directly impact home sales in the current year, as most newcomers will rent their first home.
"We may feel the impact of fewer new Canadians in our residential investment market with less demand for rental units. Mitigating the impact of this trend is a surge in first-time buyer interest. Some landlords may choose to sell to eager millennial families if rental demand softens."
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