To say that the last couple of years have been interesting is putting it mildly. A global pandemic, the likes of which the world hadn’t seen in a century. The resulting economic turmoil and mass layoffs resulting from said pandemic. There was political unrest. There were climate disasters galore ranging from flooding to wildfires to cyclones to heat waves.
Amongst all this angst, there were some positive developments though. A move to remote work has been widely seen as welcome by employers and employees alike and has resulted in a decrease in pollution. Extra time at home spent with loved ones has strengthened familial bonds. A rather glaring spotlight has been shone on the issues with long-term care facilities for seniors, and this has resulted in an increase in Canadians opting to age in place. Pet adoptions are up. Given all of this, it’s not surprising that the Canadian real estate market has benefitted greatly from this heightened focus on time spent at home, as these charts courtesy of the Canadian Real Estate Association demonstrate.
So, as the world begins a slow return to a pre-COVID normal, what are the experts predicting as far as impacts to the Canadian real estate market? Here we review some of the highlights from the RE/MAX 2022 Canadian Housing Market Outlook Report.
Real Estate is Expected to be one of the Strongest Investment Options for 2022
Good news for anyone who is planning to sell their home in the coming year – 95% of Canadian housing markets are expected to be seller’s markets. 49% of Canadians view real estate as one of the best investment options in the coming year. With an ever-increasing remote workforce, home office space and a larger housing footprint are highly desirable with buyers.
Atlantic Canada is Expected to Experience Significant Increases in Property Values
Atlantic Canada has experienced a spike in housing demand due to an influx of out-of-province buyers, meaning that all of their housing markets are seller’s markets. It is forecasted that the average sale price will increase by as much as 20% in 2022. Of the increase in out-of-province sales, many are coming from Ontario to take advantage of the greater affordability.
Atlantic Canada 2020 – 2021 residential sales numbers, as well as 2022 projections, are outlined in the chart below.
Rising house prices don’t seem to be scaring buyers off, however; 72% of survey respondents said increasing home prices did not impact their 2021 residential real estate purchasing decisions.
What About Mortgage Rates?
RE/MAX reports that 26% of Canadians have a desire to purchase a home while mortgage rates remain low. As of December 8, 2021, the Bank of Canada interest rate is 0.25% and they have indicated that it is likely to remain at this level until at least the second quarter of 2022. The rate has been set at this level since March 2020, giving Canadians access to some of the lowest mortgage rates in history.
For a better understanding of the history of Canadian interest rates and how interest rates impact home buyers, check out our blog Mortgage Rates: Yesterday and Today.
How is the Calgary Market Expected to Fare?
Specific to Calgary, RE/MAX reports the following projections:
- The average sale price in 2021 was $494,327, and the 2022 average sale price is expected to increase to $506,685;
- Calgary is expected to remain in a seller’s market situation in 2022;
- Interprovincial migration increased in 2021 and is expected to continue in 2022 (with strong migration numbers coming from BC and Ontario); and
- Sales are expected to increase by 4%.
Additional Interesting Insights:
Reviewlution shares several additional insights on the state of the Canadian real estate market:
- The average home price in 2021 was $678,091, up from $568,758 in 2020
- Two-thirds of Canadians are homeowners
- Saskatchewan experienced a 23.5% increase in home sales in 2020
- British Columbia homeowners put down the largest down payments (22.45%)
Canadian Real Estate By the Numbers
This chart shows key statistics on major Canadian residential markets.