The record real estate year of 2021 ended with buyers facing a record shortage of listings. The imbalance in access to residential property has never been so glaring.
In Quebec, the Professional Association of Real Estate Brokers has rated 2021 as the second most active year recorded in the Centris system for brokers. At most, residential sales fell by 2%, however from an absolute record recorded in 2020. Listings in force on Centris were, for their part, down 36% compared to 2020. And it it took an average of 51 days for a single-family home to find a buyer, 40 days less than in 2020.
In Greater Montreal, the 15% drop in listings of properties for sale between November and December brought them down to their lowest level on record. In other words, we have the most seller-friendly market ever, conclude the National Bank analysts.
Same observation at the Canadian level. According to data from the Canadian Real Estate Association (CREA), 666,995 residential properties changed hands on multiple listing systems in 2021. This new record exceeds the previous annual record, set in 2020, and 30% the average of the last 10 years. The Home Price Index also posted a record increase of 26.6% year over year.
Year-over-year price growth remains slightly above 20% in Greater Montreal, around 10% in Quebec City.
Other numbers: The ratio of sales to new listings has tightened to 79.7% in December, compared to a long-term average of 54.9%. There were 1.6 months of inventory across Canada at the end of December — the lowest level on record — compared to a long-term average of just over five months.
At the end of December, “property supply hit an all-time low to mark the start of 2022,” writes CREA, citing a worsening housing affordability problem.
Inflation and rate hike
Accessibility that must actually be situated in a context of inflation and rising interest rates, the dosage of the magnitude of this increase will be decisive. Statistics Canada indicated on Wednesday that in 2021, the price index for owned accommodation (+4.1%) had increased at a faster rate than that of rental accommodation prices (+1.7%). Costs related to owning a property (+3.9% on an average annual basis) posted their fastest growth since 2008 (+4.4%). For the cost associated with maintaining a property alone, the increase was 11.4%, compared to an increase of 2% in 2020. The 7.7% decline in the cost of mortgage interest at historically low levels could, however, partially offset the increase.