An aggregate 25.1% increase year on year on housing prices | Royal LePage
House prices soaring amid continued low supply-high demand
Micah Guiao
other
The first quarter saw the highest gain on record since the index began
Canadian house prices saw an aggregate 25.1% year-on-year increase to $856,900 in Q1 2022, marking the highest gain on record since the index began, according to the Royal LePage House Price Survey.
By the fourth quarter, Royal LePage is forecasting that the aggregate price of a home will increase 15% compared to Q4 2021 – pointing to a mild slowing of the market in the lead-up to 2023 but still higher than original projections.
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Phil Soper, president and chief executive officer of Royal LePage, said the low supply-high demand imbalance would continue to drive up house prices in the months ahead. Even the Bank of Canada’s recent 0.5% hike won’t be enough to tame the impact of sharp price increases.
The temporary ban on foreign buyers will not provide material relief to potential homebuyers either, since it is reported the group does not make up a significant portion of homeowners in Canada.
“Entering 2022, we had anticipated a strong first half, and moderating real estate markets thereafter. Call it buyer fatigue or easing demand, these periods of uncomfortably high home price appreciation do run their course,” Soper said. “We are seeing the first signs of moderation in some regions, as more inventory is becoming available and competition eases slightly.”
Based on housing type, single-family detached homes rose 26.7% YOY to $906,100, while condominiums rose 19.7% YOY to $612,900 across the nation’s largest real estate markets. Multiple-offer scenarios for appropriately priced listings remain the norm in most communities, Soper said. This enables homeowners to sell them above the listed price.
Read more: Priced out of Ontario, which market are homebuyers turning their attention to?
“It is worth noting that most Canadians with higher loan to value mortgages have successfully passed the stringent federal requirements of the OSFI mortgage stress test – they have proven that they can manage significantly higher rate increases than we anticipate they will see,” Soper said.
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