hat does the Canadian Housing Market Look Like in 2022? Here are the market highlights and data via CREA (The Canadian Real Estate Association):
- National home sales rose 8.6% on a month-over-month basis in October.
- Actual (not seasonally adjusted) monthly activity was down 11.5% on a year-over-year basis.
- The number of newly listed properties climbed by 3.2% from September to October.
- The MLS® Home Price Index (MLS® HPI) rose 2.7% month-over-month and was up 23.4% year-over-year.
- The actual (not seasonally adjusted) national average sale price posted an 18.2% year-over-year gain in October.
- The unemployment rate in Canada was 6.9% as of October 2021, down 0.2% from the previous month. The unemployment rate stood 6.2% below the peak from June 2020 and is below the long-run average.
INTEREST RATE OUTLOOK
- The Bank forecasts the Canadian economy to expand by 5% this year before slightly moderating to 4¼ and 3¾ percent in 2022 and 2023, respectively. The Bank anticipates that demand will be supported by strong consumption and business investment, along with an uptick in exports as the US economy recovers. The Bank also expects housing activity to remain upbeat, supported by high disposable incomes and low borrowing rates.
- Regarding inflation, the Bank noted that it had anticipated the uptick in prices but the main contributing factors to this increase (higher energy prices and pandemic-related supply bottlenecks) now appear to be more persistent. As such, the Bank now expects CPI inflation to be elevated into next year and moderate back to around the 2% target by the backend of 2022. Looking ahead, the Bank stated that it remains committed to keeping its policy interest rate at the effective lower bound until economic slack is absorbed to achieve its 2% inflation target, which it projects to occur around mid-2022.
- The first rate hike will likely be in the spring or summer of next year – sooner than suggested at in the last few announcements and quite a bit sooner than was suggested at the height of the pandemic.
- Canada’s major chartered banks are currently advertising five-year fixed mortgage special interest rates of around 2.56%. Homebuyers can often negotiate the interest rate for mortgage financing based on their creditworthiness and the degree to which they do other banking business with the mortgage lender.
- The Bank of Canada’s next scheduled interest rate announcement will be on December 8th, 2021.
- Hover over any province on the map for a quick glance at current and year-ago price levels.
- Although not displayed on the map, national and major market data are also available using the drop-down menus.
- Use the drop-down selection menus below the map to view detailed information and compare two areas
CREA’S PRICE FORCAST BY PROVINCE ACROSS CANADA: