Get ready for real estate prices to rise even higher in Canada’s hot housing market.
According to the 2022 RE/MAX Housing Market Outlook Report, the country will see steady price growth in the coming year, with active inter-provincial migration continuing to be a key driver of housing activity in many regions.
The report is based on a survey of RE/MAX Canada brokers and agents. Based on their insights, 95% of housing markets in Canada are expected to be seller’s markets, impacted by limited housing supply and high demand.
In 2022, a 9.2% increase in average residential sale prices is anticipated across the country, as the nation’s housing supply shortage continues, according to the report.
READ: Canadians Are Using Real Estate to Outrun Record Inflation
“Based on feedback from our brokers and agents, the inter-provincial relocation trend that we began to see in the summer of 2020 still remains very strong and is expected to continue into 2022,” says Christopher Alexander, President, RE/MAX Canada.
“Less-dense cities and neighbourhoods offer buyers the prospect of greater affordability, along with liveability factors such as more space. In order for these regions to retain these appealing qualities and their relative market balance, housing supply needs to be added. Without more homes and in the face of rising demand, there’s potential for conditions in these regions to shift further.”
Despite the relentless pandemic, many Canadians still feel confident in the real estate market, according to a Leger survey conducted on behalf of RE/MAX Canada. The survey found that 49% of Canadians (59% of homeowners vs. 34% non-homeowners which included renters, those not looking buy, and those currently looking to purchase), believe real estate will remain one of their best investment options in 2022.
Additionally, 49% of Canadians are confident the market will remain steady next year.
“Canadians recognize the value and investment potential in their homes. However, market challenges such as rising prices and limited supply have impacted local markets from coast-to-coast, causing angst this past year among those looking to get into the market and those hoping to move up in it,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Despite this, it’s encouraging to see that many Canadians are feeling confident in the housing market in 2022 and view it as a solid investment.”
Of the regions surveyed, 95% (36 out of 38) are likely to remain seller’s markets in 2022, according to RE/MAX agents and brokers.
The Calgary and Edmonton markets shifted from balanced conditions in 2020 to seller’s markets in 2021, which brokers and agents in the region expect to continue into 2022. This is attributed to heightened demand prompted by the inter-provincial migration trend that took place throughout 2021, which saw many homebuyers from Ontario and British Columbia (BC) driving demand high, while supply remained low.
In addition to an increase in out-of-province buyers flocking to Edmonton, the city has also welcomed investors who found themselves priced out of other markets. RBC’s provincial outlook for Alberta puts the province ahead of all others in terms of economic growth in 2022.
Regions such as Victoria, Nanaimo, Regina and Kelowna also experienced an influx of buyers in search of larger properties and greater affordability, according to RE/MAX, which is likely to continue pushing demand and prices up in 2022. “This trend has notably increased demand for single-family detached homes and in some regions, condos as well, which may continue in 2022,” reads the report.
While the report acknowledges that some buyers are choosing to move away from urban centres like Vancouver in favour of more suburban areas within BC or other provinces entirely, Vancouver/Greater Vancouver has remained a quality place to call home, according to RE/MAX.
The region continues to draw interest from Canadian and international buyers, a trend that is likely to grow next year, in tandem with rising immigration,” reads the report. Vancouver/Greater Vancouver is expected to remain a seller’s market in 2022, so long as supply remains tight and the current demand continues, according to a RE/MAX broker in Greater Vancouver Area.
Winnipeg, however, is a slight outlier in Western Canada, with a buyers’ market that is anticipated to continue in 2022. “Young couples enjoying the freedom to work from home have been driving much of the demand in the region, especially for one- and two-story detached homes,” reads the report. “The appeal of Winnipeg has had less to do with affordability, and more with lifestyle shifts such as hybrid working environments.”
Coming as a surprise to few, the market activity will remain steady in 2022, with continued average price growth, although at widely varying degrees. RE/MAX brokers anticipate average sale price increases in smaller markets such as North Bay (4%); Sudbury (5%); Thunder Bay (10%); Collingwood/Georgian Bay (10%); and Muskoka (20%), where the move-over trend has remained strong, according to the report.
Meanwhile, in Ontario’s larger markets, RE/MAX professionals say there’s a possibility that more immigration could weigh on supply levels and prices, including Ottawa (5%); Durham (7%); Brampton (8%); Toronto (10%); Mississauga (14%).
“When it comes to price appreciation year-over-year, there are a few regions that stood out in 2021 for their exponential increases across all property types,” reads the report. This includes Brampton, which rose from $869,107 in 2020 to $1,085,417 in 2021 (25%); Durham from $706,818 in 2020 to $914,48 in 2021 (29%); and London from $487,500 in 2020 to $633,700 in 2021 (30%). In comparison, Toronto experienced a relatively modest 7% increase year-over-year ($986,085 in 2020 to $1,054,922 in 2021).
In the east, all of Atlantic Canada’s regions analyzed are currently seller’s markets, with potential for average sale prices to increase between five to 20% in 2022, according to RE/MAX professionals. “Larger urban centres including Moncton, Fredericton, Saint John, Halifax, Charlottetown, and St. John’s have all experienced an influx of out-of-province buyers, especially from Ontario, moving to the region in search of greater affordability and liveability,” reads the report.
Due to this notable spike in demand, much of the Atlantic region has experienced increasing competition, especially among single-family detached homes and condos in some cities, according to RE/MAX. There is a possibility that this could be compounded as immigration continues to grow in the region.
According to RE/MAX brokers and agents, new construction is anticipated to remain strong into 2022, although – like other regions – construction activity may be impacted by ongoing supply shortages and delays in permits related to the pandemic backlog.
“Seller’s market conditions are expected to prevail across the region in 2022, with the exception of Charlottetown and Southern Nova Scotia, which may return more to a balanced state as activity gradually begins to decrease,” reads the report.
These factors have led to some of the highest price outlooks in the country, with Halifax and Moncton projecting estimated average residential sales price to increase by 16, and 20% respectively.
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