Where the Real Estate and Mortgage Market are Heading in 2020


Are you planning to buy or sell a home in 2020? Then you’ll want to read this article. If you’re like most Canadians, buying or selling a home is most likely the single biggest financial transaction of your lifetime. Get it right and you can be well on your way to financial freedom. Get it wrong and you could be digging yourself out of a financial hole for the years to come.

With further ado, here are our predictions for the real estate and mortgage market in 2020.


Real Estate in 2020

2018 was a challenging year with the introduction of the mortgage stress test. 2019 was a recovery year, with the real estate market coming back to life. With no major policy changes on the horizon, 2020 looks to be a strong year for real estate.

Royal LePage and RE/MAX are both predicting annual price growth of over three percent across Canada.

RE/MAX sees older millennials playing a key role in the real estate market in 2020. That’s because these millennials are moving into their peak earning years. This along with more Canadians being accustomed to the mortgage stress test means these groups should drive the real estate market in 2020.

Royal LePage shares a similar optimistic view. Royal LePage sees homebuyers returning to the market in 2020 that put homeownership on hold due to the stress test. A lot of these homebuyers are going to be looking for a house with a backyard. This should push up demand for housing in the suburbs.

When we break it down by region, some parts of the country are expected to be stronger than others. The Canadian Real Estate Association (CREA) expects Ontario, Quebec and the Maritimes to lead the way in terms of growth. Meanwhile, Alberta, Saskatchewan and Newfoundland and Labrador are expected to continue to lag.

CREA attributes the strength in the real estate market due to strong fundamentals. With population and employment growth expected to continue in 2020 and interest rates forecasted to remain steady or fall, this is the perfect recipe for a strong resale market.


Mortgage Rates in 2020

2020 looks to be another competitive years for mortgage rate. In 2019 we saw yet another mortgage rate war break out between the big banks. In 2020 it looks to be much of the same with financial institution competing with each other for market share. The winners from all of this will be homebuyers who will have access to more mortgage options than ever before at competitive rates.

A big question on everyone’s mind is where are interest rates going in 2020? In 2019 most economists predicted a rate cut, but that didn’t happen. Bank of Canada Governor Stephen Poloz left interest rates unchanged throughout 2019. Will it be much the same in 2020? Only time will tell.

The Bank of Canada is under pressure to cut interest rates in 2019 due to what’s been happening south of the border. The Federal Reserve cut interest rates in the U.S. in 2019. With the Canadian economy so closely linked to the U.S., many think it’s only a matter of time before Canada follows suit and cuts interest rates. That’s why many economists are predicting a rate cut in 2020, but will it actually happen? Although nothing a certainly, it seems more likely than not.

Then there’s the wild card of a new Governor of the Bank of Canada. With Stephen Poloz stepping down June 3rd, will his successor take a more aggressive stance on cutting interest rates?

2019 saw an odd thing happen. Fixed mortgage rates were actually lower than variable rate. This doesn’t happen very often. Look for the gap between fixed and variable rate to narrow in 2020, as we may see things go back to normal with fixed mortgage rates being higher

Written by Sean Cooper Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. Sean’s helping others with their mortgages as an independent mortgage broker. Get in touch with him for all your mortgage needs. For a free mortgage consultation, email Sean@BurnYourMortgage.ca or call 647–867–3711.