Downtown Vancouver skyline and harbor.
December 15, 2021 3:30 pm Published by Leave your thoughts

2021 has been a hectic year for the Canadian housing market. Effects of COVID-19 have changed the traditional office setting. Workers have traded in business suits and cubicles for casual clothing and dedicated office spaces. The increased demand for homes, especially single-family homes, has caused a shift in the housing market. 

Low mortgage rates and permanent work-from-home situations are contributing factors to the sudden demand for homes across Canada yet the housing market shows no signs of stopping.

36% of non-homeowners under the age of 40 have already given up on ever owning a home. Younger Canadians carry a pessimistic outlook as prices climb. As we head into 2022, there are many doubts about owning a home for future buyers. Analysts have examined the evidence in many provinces about the future housing market for 2022.

Vancouver Real Estate Market Projections

Downtown Vancouver skyline and harbor.

The British Columbia city has seen record-high demands for houses since the pandemic. Demands have exceeded supply over the past year by 37%, selling 113,000 units in total. However, Central 1 Credit Union calls this trend unsustainable. 

The trend will continue downward to 89,000 units, and 85,800 in 2023. As supply remains in shortage, demands continue to inflate the average sale price to $670,000 in 2022 and up 3% in 2023. Homes in the Greater Vancouver area are predicted to average around $1.2 million and increase.

The B.C. Real Estate Association (BCREA) estimates composite home prices could be even higher as demand for single-family homes has become the norm and recovery in the active listings helps balance the market.

Calgary Real Estate Market Projections

Downtown Calgary skyline.

Canada has been a red hot market for a while, and luckily Alberta has not been affected by inflation the same way British Columbia and Ontario have. Calgary is expected to enter a modest recovery as Albertans receive their vaccinations and demands slow down. 

The City of Calgary announced back in July it found a 52% increase in detached homes, compared to the 25% increase in apartments and condos. Construction homes have increased by 42.6%. With the increase in interest, property values are expected to grow more than 10%, depending on characteristics and location. 

While sales remain high, active listings dropped 14.25%, forcing buyers into bidding wars. The average house price is now $538,700. The Calgary Real Estate Board (CREB) predicts the market values will remain the same in 2022 however The Canada Mortgage and Housing Corporation (CMHC) remains positive that prices will drop within the next few years due to a sluggish economy and the effects of COVID-19. 

Moving into 2022, supply will improve as the economy returns to normal and social distancing restrictions ease. With price drops and an increase in supply, 2022 could be a buyer’s market for Calgarians and other hopeful buyers.

If you are looking to buy or sell a home in the Calgary area, contact me today and I can help you every step of the way. Maverick Group specializes in the central Alberta real estate markets, and we have lots of Airdrie homes for sale ready to be viewed or purchased.

Edmonton Real Estate Market Projections

The future of Alberta’s capital city follows a similar trend to the rest of Canada. Prices will continue to steadily increase while demand remains high. Edmonton’s real estate market will increase prices along with growing sales and new home starts.

Christian Arkilley, an analyst from CMHC remains positive about Edmonton’s future. “We expect that as immunization expands, we will see the economy open up more,” Arkilley says. “We expect travel restrictions to ease with international migration and the job market improving, and that will help boost demand for housing.”

Realtor Darcy Torhjelm, owner of Re/Max Real Estate (Edmonton) also shares Arkilley’s optimistic outlook. Torjhelm predicts the market will stabilize as more inventory becomes available and owners start listing their homes. 

A trend Torhjelm has noticed is the low demand for condominiums and rental units compared to detached homes. Vacancy rates will drop once immigration workers and international students are permitted to enter as the pandemic recedes. Edmonton is one of the most affordable metropolitan cities in Canada, which makes it one to keep an eye on, especially if you are thinking of moving to Canada

Saskatoon Real Estate Market Projections

Saskatoon skyline.

Homes in Saskatoon have also seen a sudden demand due to the pandemic. Goodson Mwale, a senior analyst at CMHC estimates new and existing homes are projected to remain elevated. He added, “We’re expecting to see continued strength in both the resell and the new home market, and we’re expecting to see a continued positive price activity in the resale market as well.” 

Properties, especially rental properties face pressure from buyers and renters as the city continues to hold limited inventory. The city is pushing for more construction in an attempt to alleviate pressures. 

In a Reuters poll, Canadian house prices are forecasted to rise but at a much slower pace in the next year, around 3.7%. However, prices in Saskatoon may drop down to 18%. One of the contributing factors is Saskatchewan’s recession before the pandemic, with its GDP falling 0.7% in 2019. Due to low-interest rates and already low housing prices, sales in the province jumped 24.5%

As long as interest rates remain low, there will be demand for housing and an increase in prices. Researchers remain optimistic for Saskatoon’s housing market as residents gain higher levels of spending despite predictions that the province’s economy will falter by 3.2% to 4.6% in 2022. There’s potential for Saskatoon once they overcome long-term structural challenges.

Regina Real Estate Market Projections

Taylor Pardy, a senior economic analyst at CMHC sees strong activity and expects it to remain strong going into 2022.

The high number of resale activities has caused overall home sales to drop. Pardy commented, “That’s creating some additional competition in the market right now and it’s leading to some upwards price pressure on average prices in particular. We’re anticipating seeing some modest increase in prices over the next few years as well.”

CMHC sees another positive year for Regina after a 22% sale surge in 2020. Going into 2022, sales will slow down into moderation in line with economic conditions and population growth.

Winnipeg Real Estate Market Projections

Unlike other provinces, Manitoba’s housing market has slowed down in recent months. Homes in Winnipeg decreased over the summer by 11%, though home prices increased 7.2%.

RE/MAX anticipates Winnipeg’s housing market will continue as a seller’s market into 2022 as young couples continue to drive demand. Many young people are looking for one- and two-story detached homes as their lifestyle has changed and hybrid working environments have become the norm.

Toronto Real Estate Market Projections

Downtown Toronto.

As one of Canada’s largest cities, it’s no surprise that the massive demand has caused an impact on housing, and Canada’s prices overall. Over the past year, Toronto has seen an influx of purchases and housing prices. The Toronto Regional Real Estate Board (TRREB) released its year-over-year findings for 2021, with total residential transactions 3.3% higher compared to 2020.

The average selling price has jumped up dramatically from $955,889 to $1,163,323. Like the rest of Canada, as sales increased, listings decreased and Toronto is 13.2% down from last year. 

Condominiums also saw an increase in activity, with a 10.6% increase in sales. The price average has gone from $633,596 to $689,831. Compared to 2020, listings declined by 30.9%

Toronto continues to see a strong trend as demand continues, especially in the Greater Toronto Area (GTA). Mimi Ng, senior vice-president of residential sales and marketing for Menkes Developments Ltd., predicts the increase in condo projects is a good indicator of 2022 trends. 

With intense competition, TRREB chief market analyst Jason Mercer commented, “As we move toward 2022, expect market conditions to become tighter as population growth in the GTA starts to trend back to pre-COVID levels.” 

As interest rates remain low, many prospective buyers want in on the housing market before the Bank of Canada raises rates. Based on the demand, house prices will continue to rise well into the end of 2021 and 2022, while conditions remain in a seller’s market.

Ottawa Real Estate Market Projections

Broker networks in Ontario predict activity across the province will remain steady, going into the new year although the average price continues to grow. 

Ottawa’s prices are great for prospective buyers searching for affordable homes. WOWA reported favourable numbers compared to other provinces. Single-family home prices increased by 19% to $716,378 while condos went up 10%. The year-over-year prices for single-family homes have increased by 2% to $716, 378. Condos fell 5% from September 2021 to October, however, remain higher compared to last year.

While many provinces such as British Columbia and Ontario brace for higher price raises, the majority of homes in Ottawa are below $1 million and eligible for a down payment of 5% and CMHC insurance. 

The competitive pricing allows a larger audience to compete for limited supply, which leaves lots of opportunities open for those seeking affordable housing in the city.

Montreal Real Estate Market Projections

Prices in Quebec have been no different from the rest of Canada. Real estate agents have dubbed the massive surge in price and demand as “the COVID market”. With a shift in lifestyles, wants, and work from home, families in Montreal are no longer interested in living in condos and high-rises, rather opting for single-family homes that can provide adequate space and a backyard. 

The Quebec Professional Association of Real Estate Brokers reported significant price hikes all over Montreal; the Island of Montreal increased 19%, Laval went up 20%, and the north shore rose 27%. Many of these single-family homes were bought well above the asking price. 

 David Rosenberg, the chief economist of Rosenberg Research says Canadians should brace for a bubble burst. Currently, Montreal’s year-over-year growth remains a little over 20% with little to no wage growth, leading to unsustainable practices for residents in Montreal. CMHC continues to closely survey Montreal, where like the rest of Canada, demand outpaces supply and keeps prices high. 

Analysts are split on the future of Montreal’s housing market but with similar evidence throughout the other provinces, 2022 will prove to most likely be a seller’s market with signs of cooling down while inventory remains low.

Halifax Real Estate Market Projections

Halifax ferry crossing the Atlantic ocean.

Over in the Maritimes, The Nova Scotia Association of Realtors reported housing prices rose 60% year-over-year. The average price currently sits around $465,000. CREA estimates the last few months of 2021 will see a big jump in the number of homes sold but entering 2022, there will be a dip in sales volume. 

Matt Honsberger, president of Royal LePage Atlantic, agrees with CREA’s predictions. “What I think CREA is saying is the degree of growth in Halifax and Atlantic Canada… it’s just unsustainable over a multi-year period,” Honsberger noted. While there are all kinds of properties on the market, buyers and inventory are at an all-time low. 

Residential sales dropped at an annualized rate of 12.3% in June, which makes sense as Nova Scotia’s year-over-year decline of 6.6% indicated the beginning of a cool-down period. With a major boom in real estate purchases after many challenging years of sluggish economic growth, RE/MAX foresees prices to advance. Many see Halifax as the next hottest city for real estate with policymakers investing in the core of the urban centre. Development and expansions to infrastructure and a population boom drive Halifax’s reputation as a major hub in Canada.

Fredericton Real Estate Market Projections

Like the rest of the Maritime provinces, Fredericton suffered slow economic growth before the COVID market. Now, the province is enjoying prosperity from the sudden house boom. Compared to New Brunswick and Nova Scotia, demand in Fredericton has begun to cool. 

Data from the Real Estate Board of Fredericton revealed residential sales dropped at an annual rate of 12.5%. Home transactions grew 34.1%, with single-family homes and condo units as the biggest contributors–prices rose 26.7% and 24.6% respectively

Buyers will be happy to hear that Fredericton’s new residential listings rocketed up 3.8%. Housing projects have increased to meet demands and are expected to continue. 

Fredericton has a positive outlook for 2022 with the cooling house market and endeavours to meet demand.

St. John’s Real Estate Market Projections

St. John’s has seen the same activity in various parts of Canada, with incredible sales gains and housing prices in 2021. It’s a strong indication of what is expected to come in 2022.

So far, single-detached homes saw the greatest increase in price by 8.4% while townhomes rose 2.8%. The average prices are currently around $372,000 and $254,000 respectively. As people ask for larger living spaces, condominium sales declined 1.9% to $256,000. Detached home prices are expected to increase by 1% for the rest of 2021 as condos and townhouses remain the same.

St. John’s struggles with inventory as demands spike, keeping it in a seller’s market going into 2022. Expect prices to continue rising, but not as dramatically as the rest of Canada. St. John’s will need to prepare more homes as they add higher-priced oil to their economy and prepare for more immigration.

Charlottetown Real Estate Market Projections

Charlottetown’s housing market has been the strongest it has in the last several decades. The Prince Edward Island (PEI) capital’s red hot housing market shows incredible growth. As Atlantic Canada has entered its cooling phase, prices continue to go up, approaching 2022. 

Residential sales fell to an annualized rate of 27.7% in July but in the first seven months of 2021, sales expanded 36.6% year-over-year to 1,403 units. The average house price in PEI is $337,148, with Charlottetown increasing by 18.3% to $392,000. Other areas of PEI have also shown outstanding growth, especially Eastern PEI, Stratford, and Summerside. 

In the next few months, Charlottetown real estate will focus efforts on supply even as the market calms down again. New listings were only 1.2% above the five-year average and prices are expected to grow at a steady rate. 

Canadians interested in taking advantage of the current housing market can expect a positive outlook in Charlottetown with its affordable prices, low-interest rates, and adequate supply.

The Future of Canada’s Real Estate Markets in 2022

With vaccination rates increasing, many places have gone back to regular routines. Schools are resuming in-class lessons, workers are returning to offices, many businesses are reopening, and immigration resumes. It’s difficult to predict the accuracy of 2022 when the economic prospects and population growth are constantly changing. 

However, several strong indicators found throughout the provinces have shown us some trends we can continue to expect. 

The Bank of Canada has pledged it will not increase rates until the second half of 2022. Many buyers, especially first-time homeowners will continue to take advantage of this in an attempt to enter the market. If you want to benefit from low-interest rates while it’s still in effect, read up on my post “How to Benefit from Low Mortgage Rates”

Low-interest rates mixed with a high volume of demand have led to rocketing house prices, and we expect this to continue as 2022 rolls around. However, many cities are tackling the inventory issue as best they can. Sales will decline in 2022 as long as there remains a shortage.

Professionals have pointed out the demand for homes and rising prices are unsustainable for Canadians in the long term. While we see that signs of cooling down have begun in some areas of the market, prices continue to heat up, specifically for Vancouver, Toronto, and Montreal.

Others predict a bubble burst in the future as CREA attempts to alleviate inflation. Robert Hogue of RBC Economics stated, “Overstretched affordability remains a significant issue and top vulnerability. A dip in population growth poses a risk, though it will be short-lived.”

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This post was written by Derek Timmons

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