2022 home price forecast increased after exceptionally strong first quarter
Tags: Real Estate
Royal LePage has increased its 2022 forecast following record price gains in the first quarter of 2022. The aggregate price of a home in Canada is expected to be 15% higher in the fourth quarter of this year compared to the end of 2021, following a supercharged start to the year. As we enter the spring market, buyer hopefuls continue to be challenged by tight competition, due to a chronic shortage of supply, despite a slight increase of inventory hitting the market in some regions.
“Entering 2022, we had anticipated a strong first half, and moderating real estate markets thereafter. Call it buyer fatigue or easing demand, these periods of uncomfortably high home price appreciation do run their course. We are seeing the first signs of moderation in some regions, as more inventory is becoming available and competition eases slightly,” said Phil Soper, president and CEO of Royal LePage. “The first quarter of the year was so strong, however, that we are bumping up our 2022 outlook. And, home prices will continue to climb in the months ahead as a result of our relentless low supply-high demand imbalance.”
While some properties may be attracting fewer bids than last year, and buyer behaviour is beginning to shift – given the recent increase in interest rates and the expectation of several more to come – listings in popular neighbourhoods that are priced appropriately continue to draw multiple offers and are selling above the list price.
Nationally, the aggregate price of a home increased 25.1% year-over-year to $856,900 in the first quarter of 2022; the highest gain on record since the Company began tracking aggregate prices. When broken out by housing type, the national median price of a single-family detached home rose 26.7% year-over-year to $906,100, while the median price of a condominium increased 19.7% year-over-year to $612,900.21.
Read Royal LePage’s first quarter release for national and regional insights.
First quarter press release highlights:
- Early signs of moderation appear as some urban markets unveil improved conditions for buyers
- Promising new federal and provincial policies aimed at tackling housing availability and affordability not expected to provide relief in 2022
- Kingston, Ontario, posts highest year-over-year aggregate and detached home price gains in Canada for the second straight quarter
- Four markets in Ontario’s Golden Horseshoe region report median single-family detached home prices above $1 million for first time