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Savings Diverted into Housing

According to the Royal LePage House Price Survey Forecast released October 14, 2020, the aggregate price of a home in Canada increased by 8.6% year-over-year to $692,964 in Q3.

Phil Soper, CEO of Royal LePage said “Most Canadians have sharply reduced spending on discretionary goods and services involving a great deal of human interaction, and with mortgage rates at record lows, many have refocused on housing investments, be it renovations to accommodate work-from-home needs, a recreational property or a new property better suited for the times.”

Household savings rate climbed to 7.6% of disposable income which is the highest rate since 1996, reported Statistics Canada. The average savings rate from 2015-2020 was approximately 3%.

Ottawa’s aggregate home price also grew significantly during Q3 rising 12% year-over-year to $536,610. Royal LePage forecasts that the aggregate price of a home in Ottawa will increase 8.5% in the fourth quarter of 2020, compared to the same quarter in 2019.

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