Canadians are about to get an update on the state of the housing market and the latest resurgence of COVID-19 has only added another layer of confusion to a year of uncertainty over where real estate prices will go in 2021.

On Tuesday, the Canadian Real Estate Association is expected to roll out its latest sales figures and prices for resale homes, and while most property watchers see a continuing short-term trend of weakening high-rise condo prices and increasing low-rise prices, the longer term impact of the pandemic remains far less certain.

An informal sampling of economists who keep an eye on the residential real estate market shows a range of views based on considerations related to how long the impact of the disease will last, including rock-bottom borrowing rates and whether buyers will continue to bid up the price of low-rise homes most in demand.

When it comes to residential real estate, price changes have a big effect on ordinary people for whom a home is a place to live, not just an investment. But even then, for most people a home remains their largest lifetime purchase. And unlike other investments, managing real estate is relatively complex and demanding.

Unintentional landlord

When Anna Blackwell and her husband bought a two-bedroom downtown condo in 2016, the Wilfrid Laurier University political science grad had no intention of becoming a landlord. But after one of the pair was offered a transfer to Portland, Ore., the couple decided to rent out their Toronto home — at least until they knew if the move stateside was going well. In September their tenant gave notice and, at the end of November, moved out.

"We were quite shocked when we found out how much lower we'd have to list to get our place rented in this competitive market," Blackwell said in an email conversation. The property that had been earning $3,150 a month was now generating $2,600.

Falling rents have been good for tenants. And though the decline hurt, it was by no means devastating for Blackwell, who bought four years ago in a sharply rising market. But as the business news service Bloomberg pointed out last week, property investors taking possession of condos they signed up to buy when the market looked hot, are now caught in a bind — having to accept losses on rent or a loss when they sell.