With the spike in demand and record-breaking price growth, many would consider 2021 to be the hottest year in Canadian real estate, so what does that mean for 2022? Here are five trends to keep your eye on.
1. Interest rates are expected to rise.
Following a trio of rate cuts prompted by the pandemic and the ensuing economic impacts, as things begin to bounce back, interest rates are expected to rise again as early as April. That would mean rates rising just in time for the busy spring real estate market. Some buyers may be looking to lock in a rock-bottom rate now, since getting any breaks on prices is unlikely. But will higher interest rates serve to cool the hot Canadian housing market? The Bank of Canada is predicted to raise its overnight rate by one-per-cent this year and only time will tell what kind of impact that will have. However, given current levels of supply and demand, a one-per-cent hike is not likely to be a significant factor on sales or prices.
2. Canadian real estate prices will likely continue rising.
The 2022 Canadian Housing Market Outlook Report analyzed 38 Canadian housing markets, identifying rising prices in 100% of them in 2021 and further growth expected across the board in 2022. From a national perspective, the average residential price is expected to increase by 9.2 percent.
3. Low supply will remain a concern across the Canadian housing market.
Housing affordability has been on a steady decline in Canada, and Ontario has become ground zero for unaffordability. It would seem the housing supply shortage is the culprit behind these rising prices, which has only been amplified by a notable spike in demand through 2020 and 2021. It is anticipated to continue, with no major increase in listings or new construction expected.
RE/MAX executives have pointed out a few possible solutions, including:
- A National Housing Strategy to boost supply, in a coordinated effort between the federal, provincial and municipal governments.
- Incentivizing developers to build more affordable, family-sized homes close to transit hubs, such as tax rebates, cutting the prohibitive red tape and easing the building application and approval process.
- Incentivizing homeowners to move and easing the financial burden associated with selling a home by offering tax rebates and re-evaluating Toronto’s double Land Transfer Tax (currently, homebuyers here pay a provincial and municipal LTT). This could help increase the supply of listings.
4. Canadian real estate will be dominated by seller’s markets.
By the end of 2021, 37 out of 38 of the Canadian housing markets analyzed by RE/MAX Canada (97%) were expected to be seller’s markets in 2022. Given that adding supply to the market is not a quick fix this is likely to continue.
5. Virtual transactions are the way of the future.
Virtual home-buying and -selling was not just a temporary trend that carried us through the pandemic lockdowns. Quite simply, consumers have enjoyed its convenience and are unlikely to give it up when COVID-19 is behind us. From websites like REMAX.ca and Realtor.ca bringing listings right to your fingertips, and virtual tours offering opportunities to view a home without ever leaving the comfort of your own, to the ease of digital paperwork, it is safe to say the virtual trend will be the new reality for many buyers and sellers.
source: https://blog.remax.ca/canadian-housing-market-trends-to-watch-in-2022/
Post a comment