Canadian Real Estate Market Predictions 2022

The year 2021 was a doozy of a year when it comes to Canadian real estate. Following the Covid Pandemic, mortgage rates hit an all-time low and home buyers began competing in a hot market for more space, which sent housing inventory into a record low for most major Canadian cities. The real estate market has hit a major wall.

The big reason for this slow-down? A lack of homes available for people to buy! While real estate prices are not declining, they are unlikely to keep up their meteoric rise in 2022 because there are fewer homes on the market compared to the last several years. Financial Post claims that this ongoing shortage of homes for sale isn’t going to change any time soon. 

Let’s take a closer look at what we can expect of the Canadian real estate market in 2022:

Sales and Prices in 2022

In the coming year, real estate experts all over the country are expecting sales to drop significantly. Projections for a 12 percent decline are making potential home buyers a bit nervous to jump into the market, hoping to hold off for a year or two in the hopes that the market will shift more towards the buying population. 

But if you’re holding onto the hope of lower home values in the foreseeable future, don’t hold your breath. The Canadian Real Estate Association has reported an average increase of 5.6 percent in housing costs over the last year and predicts that this will not change in 2022. In fact, the cost of real estate is only going to continue its steady rise in the coming year. 

With fewer homes on the market, home buyers are going to be in the driver’s seat. If you’re attempting to sell your property in 2022, it isn’t impossible but you should expect that homes will go quickly, and be willing to take a lower price than what was listed last year.

The rental market is likely to feel some of this pressure too as buyers opt for cheaper options as opposed to purchasing a home. This means more renters and fewer vacancies, which may cause rental rates to rise. 

Buying and Selling in 2022

It’s been clear that the past couple of years have showcased a seller’s market. Houses have increased significantly in cost, allowing homeowners to sell their homes for a substantial profit to those just breaking into the real estate market. 

So, what would happen if the new buyers were scarce? As it stands now, there are very few homes on the market. This scenario could create a battle between sellers who will drive up prices because they know that they don’t have to sell their property anytime soon. 

More populated areas such as the Kamloops or Aberdeen in British Columbia have become some of the most sought-after residential areas in the country. With homes becoming more and more difficult to acquire in these areas, home values in these markets are most likely going to remain strong over the next few years. 

Real estate extraordinaire Kevin Scharfenberg, who has extensive knowledge of Kamloops, BC, is telling potential home buyers to “expect a very competitive market in 2022. These past few years have come in strong and there’s no signs of slowing down. Particularly in these densely populated cities.” 

Interest Rates in 2022

The good news is that interest rates have already begun to rise over the last several years, but they are still very low compared to their historical averages. If the market continues to stagnate, banks are likely to increase mortgage rates even more which will give buyers an incentive to act now instead of waiting for rates to rise further.

If you are planning on purchasing a home in the new year, don’t sit around waiting for interest rates to rise further. Get yourself into the market now while you can still claim that low-interest rate that has been enticing millions of potential homeowners over the past several years! 

The Bottom Line in 2022

The real estate market in Canada over the next several years is certainly going to be one to watch. While home values have increased exponentially in recent times, expect prices in 2022 to remain stable if not increase slightly. The real estate market seems to always go through cycles, but experts all agree that this time around there are more obstacles than ever before. 

The truth is that it’s hard not to see things looking up for Canada’s real estate industry in the next few years. Predictions of prices decreasing or sales slowing down are not in the cards. If anything, the market has shown that it will only continue to rise with no sign of slowing down. There’s certainly never been a better time to invest in Canadian real estate than at this very moment. 

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