The real estate market experienced another year of record prices, reveals the quarterly study of Royal LePage published this Friday. Strong demand still outstrips the amount of properties for sale, and Royal LePage even predicts that the anticipation of rising interest rates could fuel that interest in 2022.
Posted at 9:00 a.m.
The price of a property in Canada rose 17.1% from the same period last year to reach $779,000 in the fourth quarter of 2021, says the study which looked at 62 regions across the country.
Of the regions surveyed, 87% experienced double-digit growth. The Kingston area in Ontario topped the list with a 38.1% increase, while Edmonton recorded the smallest increase at 5%. The Greater Montreal area grew by 19.7% in the fourth quarter, but the biggest increase occurred during the first and second quarters.
In the Greater Montreal area, the median price for all properties combined is $532,600, with the median price for a single-family home being $595,500, while that for a condominium apartment is $428,900.
Some buyers have turned to condominiums, due to the lack of single-family properties for sale.
“Real estate demand has weakened slightly in line with the progress of vaccinations and the reduction of sanitary measures during the last half of the year,” said Dominic St-Pierre, vice-president and general manager of Royal LePage in Quebec. .
However, with the tightening of sanitary measures announced at the end of December, Royal LePage expects a very dynamic first quarter in the greater Montreal area, with January being known to post the highest number of properties to to sell.
The pace of property price appreciation since the start of the pandemic is linked, according to Dominic St-Pierre, to the fact that housing needs have changed among consumers. “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 in view of the improvement in public health, now telework has become compulsory again, and the options for entertainment, rarer. »
Price increase in 2022
Royal LePage expects home price growth to once again be in the double digits in 2022, due to the shortage of properties in the resale, new construction and rental markets.
“Many real estate watchers expect the inevitable rise in borrowing costs to bring an abrupt end to the current seller’s market, which is characterized by rising property values,” said Phil Soper, President and Chief management of Royal LePage.
However, he believes that the federal government’s mortgage stress test, which required buyers to meet the criteria for a loan at a much higher rate than they will actually pay, has created a sufficiently important.
According to Royal LePage, these rate increases may not sufficiently offset the strong upward pressure on house prices exerted by the crisis of the shortage of properties in Canada.
Royal LePage expects prices to rise 10.5% domestically, while those in the Greater Montreal Area are expected to rise 8.0% by the end of the fourth quarter of 2022 compared to the same period in 2021.
The Royal LePage Home Price Study is based on aggregate pricing, which is calculated as the weighted average of the median value of all property types studied, resale market transactions and new constructions.