Fourth quarter highlights:
- National aggregate home price increased 17.1% year-over-year in final quarter of 2021
- 87% of the report's 62 regions saw double-digit year-over-year aggregate price growth in Q4
- 61% of the report's 62 markets saw a quarterly aggregate price increase of 3% or greater
Kingston, Ontario , posts highest year-over-year aggregate and detached home price gains inCanada (38.1% and 44.3%, respectively)- High demand oustripping low inventory at start of 2022 signals further home price gains going into spring market
"Like a bad dream that disrupts your sleep for months on end, we ushered in 2022 with a fresh round of pandemic restrictions designed to combat a new wave of infections. Asked to stay away from the workplace and unable to travel even locally for entertainment, thousands of Canadians have been redirecting their growing savings into improving living conditions, as the family home doubles as office, restaurant and schoolroom," said
The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation's largest real estate markets. When broken out by housing type, the national median price of a single-family detached home rose 21.1 per cent year-over-year to
Inventory
Eighty-seven per cent of the report's markets posted double-digit year-over-year aggregate price increases, while 61 per cent of the markets saw a quarterly price increase of 3.0 per cent or greater, which is historically not typical of the Canadian real estate market in a fourth quarter.
"The shortage of homes available for sale or rent is one of the major social and economic challenges of our times," noted Soper. "Policy makers at all levels of government may take comfort from 2022's very modest improvement in the supply of available properties relative to demand, yet we see home prices rising at double-digit levels again this year."
"Everywhere, in our largest urban centres, and in the nation's small and medium-sized towns and cities, new homes are not being built fast enough to satisfy growing demand," said Soper. "In addition to the slow and expensive regulatory processes that burden builders, construction has been hampered by pandemic-specific challenges, including labour shortages and the increased cost of construction materials as suppliers struggle with supply chain issues. Some developers have been hesitant to commit to new projects."
Interest rates
"Many industry watchers expect the inevitable rise in borrowing costs will abruptly end the current seller's market with its characteristic rising home values," Soper said. "We are experiencing the first expansionary housing cycle, which began in the second quarter of 2020, since the introduction of the federal mortgage stress test. Buyers have had to qualify for a loan at a rate much higher than what they will actually pay, creating a significant buffer before they reach their capacity to manage larger payments."
While rising interest rates slow house price appreciation, higher borrowing costs will be coming off historical lows and the increases may not be enough to offset the significant upward price pressure from
Federal policy
Royal LePage supports policies that are supportive of transparency in the real estate process and that prioritize consumers' best interests. One of the proposed changes by the Federal government is an end to blind-bidding in real estate transactions. While this would enhance transparency, it is not expected to improve affordability. Additionally, a one per cent tax on foreign-owned vacant properties, which came into effect on
"Policies that attempt to artificially quell demand in the face of growing household formation are distractions from
Immigration
As noted in previous releases, immigration remains one of the largest drivers of buyer demand. According to the
In December, Royal LePage issued its 2022 forecast stating that the national aggregate price of a home is expected to increase 10.5 per cent year-over-year.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
REGIONAL SUMMARIES
The aggregate price of a home in the
"If the fourth quarter of 2021 is any indication of what is in store for the GTA housing market in the coming months, buyers can expect tight competition through the spring, as demand continues to outpace supply across the region and in every segment of the market," said
In the city of
"As affordability continues to wane in the downtown core and the greater region, demand for condominiums is increasing. Many first-time buyers, as well as those who have been priced out of the detached segment over the last year, see condos as an opportunity to enter the real estate market. Without a significant and speedy boost in housing supply, major urban centres like
Yolevski noted that while many towns and smaller cities in the Golden Horseshoe have been affected by the trend of Torontonians migrating outside the city since the onset of the pandemic, most newcomers expected to enter
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in the
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in the
"The real estate market behaved as expected, with strong price growth in the first half of the year, followed by easing price gains towards the end of 2021," said
In Montreal Centre, the aggregate price of a home increased 10.7 per cent year-over-year to
"The rate of home price appreciation that we have seen since the start of the pandemic is closely tied to the fact that consumers' housing needs have changed," said
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in the
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in
"The supply of available homes in every property segment has reached historic lows, meaning prices can only move up," said
Ryalls noted that multiple-offer scenarios are the norm, and most properties listed sell over the asking price, usually without conditions.
In the city of
"We've begun the year with a record low number of homes for sale. Buyers who were unable to transact in the final quarter of 2021 will resume their search, in addition to new demand which normally arrives to the market toward the spring. Without a significant increase in the inventory of available homes, and with the possible impact of the emergence of Omicron, upward pressure on prices will persist and sales volumes are not likely to increase in the near term," added Ryalls.
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in
"The
Rogan added that housing demand is largely driven by millennials looking to enter the market. He noted that most buyers in this demographic have two incomes, affording them a substantial monthly budget. However, securing a sizable down payment can be difficult.
"Young Canadians value homeownership, and they want to get on the real estate ladder as soon as possible," said Rogan. "With inventory reaching historic lows, navigating the housing market has become increasingly challenging for both buyers and sellers. If this level of demand continues, without a significant increase in supply,
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in
"
Lyall noted that the city's real estate market is facing an inventory shortage across all property types, with the exception of condominiums.
"A booming job market, quality of life and affordability are among the top factors contributing to the current increase of demand for housing in
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in
"The positive momentum of
Shearer noted that new developments continue to be challenged by the increasing costs associated with labour and building material shortages, as well as a sense of hesitancy among developers, spurred by uncertainty surrounding pandemic recovery.
"The supply shortage remains a major roadblock for would-be buyers and continues to apply upward pressure to prices. I expect we'll see a surge of demand in the first half of 2022, ahead of expected interest rate hikes," added Shearer.
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in
"A lack of available housing supply has left many buyer hopefuls disappointed. As such, unmet demand from the fourth quarter of 2021 will spill over into the new year, with the hope that the spring market will bring with it some much-needed additional inventory," said
Honsberger added that out-of-province buyers continue to be a major driver of demand and price appreciation in
"As we enter yet another phase of pandemic-related restrictions, the need and desire for more space and the option to work remotely continue to make the Maritimes a very attractive place to live for people from all across
The provincial government is still considering a proposed tax on non-resident homebuyers in
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in
"Inventory shortages caused a lot of buyer fatigue in the fourth quarter, especially among first-time homebuyers, which means a lot of that pent-up demand will be transferred to this year," said
Froese noted that the city's condominium segment is seeing strong price appreciation, as low supply of detached homes continues to drive demand for more affordable units.
"Detached homes are typically the most highly sought-after housing type in
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
The aggregate price of a home in
"
Duggleby added that constraints in the supply chain resulting in low supply of building materials continue to delay new construction projects.
"New housing supply is not being created fast enough to keep up with growing demand. As
Duggleby expects new job creation in the potash industry and canola processing sector will be a main driver of demand in the region over the coming year.
In December, Royal LePage issued a forecast projecting that the aggregate price of a home in
Royal LePage Home Price Data:
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
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About the
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of approximately 19,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the
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1 Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by |
2 Statistics Canada, https://www150.statcan.gc.ca/n1/daily-quotidien/211117/dq211117a-eng.htm |
3 Royal LePage Newcomer Survey, 2019, https://www.royallepage.ca/en/realestate/news/one-in-five-homes-purchased-by-canadian-newcomers/ |
SOURCE
© Canada Newswire, source