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 in
Canada (38.1% and 44.3%,
respectively)
- High demand oustripping low inventory at start of 2022 signals
further home price gains going into spring market
TORONTO, Jan. 14, 2022 /CNW/ - According to the Royal
LePage House Price Survey released today, the
aggregate1 price of a home in
Canada increased 17.1 per cent
year-over-year to $779,000 in the
fourth quarter of 2021. Canada's
real estate market has sustained another year of record prices, as
strong buyer demand continues to outpace supply in almost every
market from coast to coast.
"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
Phil Soper, president and CEO of
Royal LePage. "It has been a busy
winter in the housing industry and a very busy spring looms
ahead."
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 $811,900,
while the median price of a condominium increased 15.8 per cent
year-over-year to $553,800. Price
data, which includes both resale and new build, is provided by
Royal LePage's sister company RPS
Real Property Solutions, a leading Canadian real estate valuation
company.
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."
Canada's chronic housing
shortage pre-existed the pandemic and with growing household
formation and more newcomers to Canada adding to demand, affordability
threatens to erode again.
"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
Canada's inflation rate reached
an 18-year high2 at the end of 2021, driven
by increased costs to consumer goods, including gasoline and food,
and significant delays in the supply chain. The Bank of
Canada is expected to begin
increasing its overnight lending rate incrementally later this
year, which would result in higher mortgage 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 Canada's housing
supply crisis.
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 January 1st, is not expected to
materially increase housing supply. The nationwide inventory
shortage remains the culprit tied to eroding affordability.
"Policies that attempt to artificially quell demand in the face
of growing household formation are distractions from Canada's housing shortage crisis," concluded
Soper.
Immigration
As noted in previous releases, immigration remains one of the
largest drivers of buyer demand. According to the Royal LePage
Newcomer Survey, the average duration before newcomers purchases a
home is three years after arrival and, nationally, 64 per cent rent
their first home, spurring significant rental demand in large urban
centres.3
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
Greater Toronto Area
The aggregate price of a home in the Greater Toronto Area increased 17.3 per cent
year-over-year to $1,119,800 in the
fourth quarter of 2021. Broken out by housing type, the median
price of a single-family detached home increased 22.4 per cent to
$1,421,200, while the median price of
a condominium increased 14.8 per cent to $665,400 during the same period.
"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 Karen Yolevski, chief
operating officer, Royal LePage Real Estate Services Ltd. "This
competition will continue to put upward pressure on prices, pushing
some buyers to increase their budgets, expand the parameters of
their geographical search or consider a different housing
type."
In the city of Toronto, the
aggregate price of a home increased 8.1 per cent year-over-year to
$1,138,000 in the fourth quarter of
2021. During the same period, the median price of a single-family
detached home increased 12.5 per cent to $1,580,500, while the median price of a
condominium increased 13.8 per cent to $711,200.
"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 Toronto will remain firmly in a seller's
market."
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 Canada
in 2022 will settle in one of the three largest urban centres. This
will increase competition in both the resale and rental
markets.
In December, Royal LePage issued
a forecast projecting that the aggregate price of a home in the
Greater Toronto Area will increase
11.0 per cent in the fourth quarter of 2022, compared to the same
quarter in 2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Greater Montreal
Area
The aggregate price of a home in the Greater Montreal Area increased 19.7 per cent
year-over-year to $532,600 in the
fourth quarter of 2021. Broken out by housing type, the median
price of a single-family detached home increased 20.0 per cent to
$595,500, while the median price of a
condominium increased 18.2 per cent to $428,900 during the same period. The condominium
market posted the fastest price growth of all housing types
reported in the fourth quarter of 2021 in the Greater Montreal Area.
"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 Dominic St-Pierre, vice-president and general
manager of Royal LePage for the
Quebec region. "Real estate demand
slowed slightly, as vaccination rates ramped up and health
restrictions decreased during the second part of the year. However,
the rate of price appreciation in the Greater Montreal Area during the fourth
quarter of 2021, compared to the same period in 2020, proved to be
robust. While we reported a significant increase in the
year-over-year aggregate price, the strongest price growth occurred
in the first six months of 2021," he added.
In Montreal Centre, the aggregate price of a home increased 10.7
per cent year-over-year to $669,500
in the fourth quarter of 2021. During the same period, the median
price of a single-family detached home increased 15.3 per cent to
$1,101,500, while the median price of
a condominium increased 6.2 per cent to $509,900.
"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 St-Pierre. "The home has become the place for
all personal and professional activities, and just when we thought
we could go back to our usual activities, remote work became
mandatory again, and entertainment options, more limited. With the
stricter health measures announced in December, demand for real
estate is not likely to decrease and we expect a brisk first
quarter in Greater Montreal."
St-Pierre noted that
historically, the month of January is known to post the highest
count of new listings. However, he expects any new inventory will
be absorbed very quickly.
In December, Royal LePage issued
a forecast projecting that the aggregate price of a home in the
Greater Montreal Area will
increase 8.0 per cent in the fourth quarter of 2022, compared to
the same quarter in 2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Greater
Vancouver
The aggregate price of a home in Greater Vancouver increased 17.1 per cent
year-over-year to $1,253,300 in the
fourth quarter of 2021. Broken out by housing type, the median
price of a single-family detached home increased 23.3 per cent to
$1,707,900, while the median price of
a condominium increased 12.6 per cent to $717,200 during the same period.
"The supply of available homes in every property segment has
reached historic lows, meaning prices can only move up," said
Randy Ryalls, general manager, Royal
LePage Sterling Realty. "And, because the inventory shortage cannot
be solved quickly, tight competition and rising prices are likely
to persist for the foreseeable future."
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 Vancouver, the
aggregate price of a home increased 15.4 per cent year-over-year to
$1,375,000 in the fourth quarter of
2021. During the same period, the median price of a single-family
detached home increased 14.4 per cent to $2,498,000, while the median price of a
condominium increased 6.5 per cent to $788,400.
"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
Greater Vancouver will increase
10.5 per cent in the fourth quarter of 2022, compared to the same
quarter in 2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Ottawa
The aggregate price of a home in Ottawa increased 17.2 per cent year-over-year
to $739,700 in the fourth quarter of
2021. Broken out by housing type, the median price of a
single-family detached home increased 20.0 per cent to $876,600, while the median price of a condominium
increased 11.5 per cent to $417,700
during the same period.
"The Ottawa housing market
continued to see strong demand in the fourth quarter of 2021. And,
I expect the looming threat of interest rate hikes will further
spur demand in the first half of this year," said John Rogan, broker of record, Royal LePage
Performance Realty. "Although we are seeing fewer multiple-offer
scenarios than earlier in the pandemic, competition remains tight
due to a shortage of supply."
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, Ottawa will remain in a
firm seller's market through 2022."
In December, Royal LePage issued
a forecast projecting that the aggregate price of a home in
Ottawa will increase 9.0 per cent
in the fourth quarter of 2022, compared to the same quarter in
2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Calgary
The aggregate price of a home in Calgary increased 9.0 per cent year-over-year
to $576,800 in the fourth quarter of
2021. Broken out by housing type, the median price of a
single-family detached home increased 11.6 per cent to $650,800, while the median price of a condominium
increased 3.0 per cent to $224,700
during the same period.
"Calgary's real estate market
finished the year strong, and I believe the trend will continue
into the spring market of 2022. As demand continues to outpace
supply in one of the country's most affordable major cities, prices
are expected to continue increasing," said Corinne Lyall, broker and owner, Royal LePage
Benchmark. "A lack of inventory, especially in the lower end of the
detached market, continues to drive price appreciation and create
an increasingly competitive environment for first-time buyers."
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 Calgary,"
added Lyall. "Pent-up demand deferred to the new year is likely to
spur a brisk spring market."
In December, Royal LePage issued
a forecast projecting that the aggregate price of a home in
Calgary will increase 6.0 per cent
in the fourth quarter of 2022, compared to the same quarter in
2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Edmonton
The aggregate price of a home in Edmonton increased 5.0 per cent year-over-year
to $428,400 in the fourth quarter of
2021. Broken out by housing type, the median price of a
single-family detached home increased 11.6 per cent to $469,900, while the median price of a condominium
decreased 2.0 per cent to $193,600
during the same period.
"The positive momentum of Edmonton's economy, and the relative
affordability of the city, continues to drive demand from
first-time buyers and young professionals looking to move up in the
housing market," said Tom Shearer,
broker and owner, Royal LePage Noralta Real Estate. "As strong
demand continues to outpace housing supply, house prices will
remain on their upward trajectory."
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
Edmonton will increase 5.0 per
cent in the fourth quarter of 2022, compared to the same quarter in
2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Halifax
The aggregate price of a home in Halifax increased 12.6 per cent year-over-year
to $484,800 in the fourth quarter of
2021. Broken out by housing type, the median price of a
single-family detached home increased 15.4 per cent to $543,000, while the median price of a condominium
increased 13.6 per cent to $388,500
during the same period.
"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 Matt Honsberger, broker, and
owner, Royal LePage Atlantic. "Without a significant increase of
new listings, the number of sales will likely slow as prices
continue to rise."
Honsberger added that out-of-province buyers continue to be a
major driver of demand and price appreciation in Halifax and the surrounding
neighbourhoods.
"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 Canada,"
said Honsberger.
The provincial government is still considering a proposed tax on
non-resident homebuyers in Nova
Scotia.
In December, Royal LePage issued
a forecast projecting that the aggregate price of a home in
Halifax will increase 10.0 per
cent in the fourth quarter of 2022, compared to the same quarter in
2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Winnipeg
The aggregate price of a home in Winnipeg increased 9.6 per cent year-over-year
to $357,200 in the fourth quarter of
2021. Broken out by housing type, the median price of a
single-family detached home increased 14.7 per cent to $390,800, while the median price of a condominium
increased 16.1 per cent to $233,600
during the same period.
"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
Michael Froese, broker and manager,
Royal LePage Prime Real Estate. "I expect a brisk spring market as
young buyer hopefuls compete to secure a purchase before borrowing
costs increase significantly."
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 Winnipeg. However,
some buyers are considering alternative property types that are
more affordable. I expect this trend to continue into the spring,"
added Froese.
In December, Royal LePage issued
a forecast projecting that the aggregate price of a home in
Winnipeg will increase 6.0 per
cent in the fourth quarter of 2022, compared to the same quarter in
2021.
Royal LePage House Price Survey Chart:
rlp.ca/house-prices-Q4-2021
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q4-2021
Regina
The aggregate price of a home in Regina increased 13.2 per cent year-over-year
to $360,100 in the fourth quarter of
2021. Broken out by housing type, the median price of a
single-family detached home increased 15.9 per cent to $387,800, while the median price of a condominium
increased 13.4 per cent to $204,300
during the same period.
"Regina's housing market
remained strong through November and December, which are
traditionally slower months in the region," said Mike Duggleby, broker and owner, Royal LePage
Regina Realty. "I hope to see an increase in supply in the spring,
to help satisfy some of the pent-up demand. Better weather
conditions will likely entice sellers to list their
properties."
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 Canada
looks to increase its immigration targets in 2022, competition
among buyers will remain tight and prices will continue to rise,"
said Duggleby.
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
Regina will increase 6.0 per cent
in the fourth quarter of 2022, compared to the same quarter in
2021.
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 Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the
most common types of housing, nationally and in 62 of the nation's
largest real estate markets. Housing values in the Royal LePage
House Price Survey are based on the Royal LePage Canadian Real
Estate Market Composite, produced quarterly through the use of
company data in addition to data and analytics from its sister
company, RPS Real Property Solutions, the trusted source for
residential real estate intelligence and analytics in Canada. Commentary on housing and forecast
values are provided by Royal LePage
residential real estate experts, based on their opinions and market
knowledge.
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 Royal LePage
Shelter Foundation, dedicated to supporting women's and children's
shelters and educational programs aimed at ending domestic
violence. Royal LePage is a
Bridgemarq Real Estate Services Inc. company, a TSX-listed
corporation trading under the symbol (TSX: BRE)For more
information, please visit www.royallepage.ca.
__________________________
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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
RPS Real Property Solutions and includes both resale and new
build.
|
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/
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SOURCE Royal LePage Real Estate Services