Royal LePage forecasts double-digit home price growth in Canada in 2022
I’m thrilled to present an outlook for the Canadian real estate market in 2022. These are predictions brought to you by Royal LePage and are a great benchmark. If you’re planning on buying or selling in 2022 then read along to see what’s potentially in store this year. If you have questions about buying or selling real estate in the Shuswap area then please reach out to me directly!
Key highlights from the national release include:
- Canada’s national aggregate home price forecast to rise 10.5% by the end of 2022.
- Omicron variant emergence may extend period of unusually strong real estate markets.
- The GTA is the only region where condominium price appreciation is forecast to outpace that of detached homes; prices expected to rise 12.0% year-over-year in 2022.
- Greater regions of Toronto and Vancouver forecast to see highest aggregate price appreciation at 11.0% and 10.5%, respectively.
- Detached home prices in Halifax expected to rise 10.5%, followed by the Greater Montreal Area and Ottawa (9.0%).
- Housing markets are expected to be unusually active through the winter season.
The aggregate price of a home in Canada is set to rise 10.5% year-over-year
After two years of strong price appreciation, Canadian home prices are poised to increase significantly in 2022, albeit at a slower pace than in previous years. According to the Royal LePage Market Survey Forecast, the aggregate price of a home in Canada is set to rise 10.5% year-over-year to $859,700 in the fourth quarter of 2022, with the median price of a single-family detached property projected to increase 11.0% to $918,000, and the median price of a condominium expected to increase 8.0% to $594,000.
Many factors contribute to the strength of the country’s real estate market
Pent-up demand from buyers who were unable to transact in 2021, coupled with the growing need for shelter from new household formation and newcomers to Canada, will continue to put upward price pressure on a market suffering from a chronic supply shortage. Canada’s strong economy, healthy full-time employment trends, and paradoxically, the emergence of a new coronavirus variant, should all contribute to the strength of the country’s real estate market.
“While the emergence of another COVID-19 variant is disheartening, we can’t ignore its probable impact on our nation’s real estate market,” said Phil Soper, president, and CEO, Royal LePage. “It is hard to imagine that the Bank of Canada will begin the inevitable campaign to dampen inflation through higher rates with much still to be learned about Omicron and cases on the rise again. Employers may back-off plans to mandate a return to the office, sustaining the hyper-focus on the importance of the home as a place to both live and work. And, normal travel and entertainment will again be curtailed, continuing the household cash stockpiling trend that has defined the pandemic era.”
The condominium segment has rebounded as affordability wanes
While pandemic-related lockdowns and a mandate to work remotely drove up demand for larger homes with outdoor space from buyers who might typically have purchased condominiums prior to the pandemic, the condominium segment has rebounded as affordability wanes in the middle and upper ends of the market.
“Demand for condos has picked up significantly in recent months, especially in major cities like Toronto and Montreal,” said Karen Yolevski, chief operating officer, Royal LePage Real Estate Services Ltd. “The price appreciation gap between condominiums and detached properties is narrowing. This trend will continue in 2022, as entry-level buyers are priced out of more expensive property segments, and the revival of the downtown core continues. Young professionals and those seeking a vibrant entertainment scene generally gravitate to the city lifestyle.”