Prepare for a sales dip
The Canadian Real Estate Association predicts the average home price will increase to $718,000 (up 5.6 per cent) in 2022. The number of home sales peaked in 2021 (some 656,000 properties traded hands via MLS), and “national home sales are forecast to fall by 12.1 per cent to around 577,000 units in 2022.”
Bubbles could burst
In its annual global real estate bubble index, UBS Wealth Management ranked Toronto as the second-worst city based on risk, next to Frankfurt, Germany, though Vancouver is in risky territory, too. Its forecast for Canada’s housing market: “Stretched affordability, tighter mortgage stress test requirements and an expected tightening of monetary policy by the Bank of Canada will challenge price levels in the coming quarters.”
Prices will drop—eventually
A recent RBC report said pent-up demand would fuel hectic market activity in the near term. “It will take longer for upward pressure to dissipate than we previously thought . . . Expect prices to flatten in the second half of 2022 instead of the early part of the year.”
This article appears in print in the January 2022 issue of Maclean’s magazine with the headline, “Property predictions.” Subscribe to the monthly print magazine here.
The post Canada’s real estate market in 2022: What to expect in the new year appeared first on Macleans.ca.