Supply-and-demand issues will likely remain dominant concerns
Following a landmark year that saw Canada’s home sales total reach 666,995 properties (up by approximately 20% annually), the Save Max Group of Companies highlighted the major factors that will affect the national housing market in 2022.
Inventory reached an all-time low in 2021, and this is likely to make itself felt through at least the first quarter of this year – especially considering that, at present, there is currently less than two months of inventory on the national market.
“It has been only four times that these record-breaking low levels of inventory have occurred, and all have been in 2020-21. Supply will be an extremely critical area to watch in the next few months and it certainly is not a quick fix,” Save Max said. “Affordable housing units continue to lag way behind the demand and has been a chronic issue in Canada, and the pandemic only exacerbated an existing problem and brought it more to the forefront.”
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The already-low levels of inventory will be further depleted by immigration. Canada’s government is aiming to welcome an estimated 411,000 newcomers in 2022 and 421,000 in 2023.
“The first requirement for immigrants is they all need housing and whether it is to rent or buy, it will drive up and sustain demand,” Save Max said. “In the rental properties market, there will always be investors and for buyers it is still affordable because many of them are highly trained and have access to six-figure incomes.”
Together, these factors will push home prices further upward, with the Canadian Real Estate Association predicting that national prices will grow by 9.2% by the end of 2022.
