Real estate trends for Canada 2022

Tighter lending rules and historically low mortgage rates had led to the toronto real estate crash during the pandemic. Fortunately, that is all set to change by 2022. According to the CMHC, home sales will reach 602,300 by 2022, resulting in an average price of $649,400, a 14% increase over last year. However, it is hard to forecast housing prices during an uncertain period like this. Here is what we expect the housing market to look like in 2022 based on statistics and expert opinion. Find out more here.

Fluctuating down payment averages in Canada

The down payment averages in the Canadian real estate market showed a striking difference between the major Canadian provinces. Real estate surveys were conducted in five major markets, including Nova Scotia, British Columbia, Ontario, Quebec, and Alberta, in December 2020 and mid-2021. The reports revealed that down payment averages decreased by 20% across all these markets, except for Nova Scotia, where they increased tremendously. Analysts predict that this trend will continue through 2021 and the beginning of 2022. The sharp rise in down payments in Atlantic Canada has been attributed to out-of-province buyers and move-up buyers becoming more interested in the province’s quality of living.

Lower interest rates expected to continue

Rates are expected to remain low until late 2022. The Bank of Canada cut interest rates to a striking low of 0.25% after the pandemic spread and economic slump. According to the central bank’s revised statement, rates will remain at this level until the economy is fully recovered. Although the overnight rate is not expected to rise anytime soon, banks have the privilege of raising their fixed-rate mortgages. But the current uncertainties make it unlikely to happen before at least the second half of 2022.

New mortgage stress rules

Canada saw a sharp increase in new mortgages in the first quarter of 2021. The increase was 41% YoY, and the approval rates increased by 20.5%. This increase in the mortgage is causing undue stress on the economy.

As a result, new stress test rules are being rolled out that impose a 5.25% repayment rate on borrowers. Under this stress test, the pool of qualified borrowers is expected to shrink. Stress rules have led to a steady increase in the rental market of purpose-built apartments, which is expected to grow by 75% next year, helping to ease the housing affordability crisis now prevailing in the country.

Dwindling Condo market in Toronto

The condo market in Toronto has taken a sharp hit due to the pandemic due to the decline in immigration and the new remote working trends. Overall, condo markets are slower than other markets. However, realtors are also noting a piqued interest in Condos since 2021 as vaccination drives increased and the economy improved. Condo prices are also expected to rise as long as single-family home prices continue to rise.

Despite the impending third wave, Canadian home prices continue to rise. Meanwhile, the pace of price rises is expected to slow for the remainder of the year. It is better to buy a house in the current economic situation when you’re emotionally and financially prepared.