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‘Persistent demand coupled with low inventory drives 2022 home price forecast higher to 15%’: Royal LePage House Price Survey

Seller’s market conditions continue as we move into the spring market, despite rising prices, further expected interest rate hikes and economic uncertainty

First quarter highlights:

National aggregate home price soars 25.1% year-over-year in first quarter of 2022 – highest Q1 gain on record
Kingston, Ontario, posts highest year-over-year aggregate and detached home price gains in Canada for the second straight quarter
Four markets in Ontario’s Golden Horseshoe region report median single-family detached home prices above $1 million for first time
Early signs of moderation appear as some urban markets unveil improved conditions for buyers
Promising new federal and provincial policies aimed at tackling housing availability and affordability not expected to provide relief in 2022

According to the Royal LePage House Price Survey released today, the aggregate[1] price of a home in Canada increased 25.1 per cent year-over-year to $856,900 in the first quarter of 2022; the highest gain on record since the Company began tracking aggregate prices. As strong buyer demand continues to outpace supply in almost every market from coast to coast, Royal LePage is forecasting continued strong seller’s market conditions this spring.

“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. We are seeing the first signs of moderation in some regions, as more inventory is becoming available and competition eases slightly,” said Phil Soper, president and CEO of Royal LePage. “The first quarter of the year was so strong, however, that we are bumping up our 2022 outlook. And, home prices will continue to climb in the months ahead as a result of our relentless low supply-high demand imbalance.”

Soper added that while the Bank of Canada announcement of a 0.5 per cent interest rate increase will be a drag on demand, its impact will be relatively minor compared to the impact of sharply higher home prices. The central bank has indicated that it intends to continue to increase the overnight rate through 2023.

“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,” said Soper.

The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home rose 26.7 per cent year-over-year to $906,100, while the median price of a condominium increased 19.7 per cent year-over-year to $612,900. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.

While some properties were attracting fewer bids, listings in popular neighbourhoods that are priced appropriately are still commanding multiple offers and selling above the list price.

“There is a notable difference in buyer sentiment and behaviour today,” Soper continued. “Consumer confidence is being challenged as the lingering impact of the pandemic and worrisome geopolitical situation in Eastern Europe raises questions about the stickiness of inflation and the trajectory of interest rates. Yet, while there may be fewer bids on accurately priced properties, housing supply is so tight that multiple-offer scenarios remain the norm in most communities.”

In the first quarter of 2022, four cities in Ontario’s Golden Horseshoe region – Barrie, Cambridge, Kitchener-Waterloo and Oshawa – recorded median single-family detached home prices that crossed the million-dollar threshold for the first time, as Torontonians continue to search for affordable homes within a reasonable commuting distance while working partially or fully remotely.

Royal LePage is forecasting that the aggregate price of a home in Canada will increase 15.0 per cent in the fourth quarter of 2022, compared to the same quarter last year. The previous forecast, released in December, 2021, has been revised upward to reflect the continued strength of the market through the first quarter of the year.

Open bidding

On April 6th, 2022, the Canadian Real Estate Association (CREA) announced it would introduce a pilot project this summer in select markets across Canada to display real-time tracking of offers on listings.

“Royal LePage supports efforts to improve transparency within the industry and commends CREA on their planned initiatives, which are intended to bring additional information to consumers engaged in the home buying process,” said Soper. “However, politicians who hope that a simple change to the property purchase process will somehow make housing more affordable will be sorely disappointed. Jurisdictions, where open bidding or auctions are much more common, have experienced exactly the same run up in home values during the pandemic. The affordability challenge will see progress when the housing shortage crisis eases, and not before.”

Federal and Provincial Housing Policy

On April 7th, the federal government announced its 2022 budget that includes more than $10 billion to support housing affordability along with demand-side policies. The federal government has acknowledged that 3.5 million new homes are required by 2031 to keep up with demand.

“Access to suitable shelter is one of the great social challenges of our time. I am pleased to see it addressed in the federal budget, however the budget requires significant participation from provincial and municipal governments to hit its target to provide housing for current demand as well as future demand from new household formation and immigration,” said Soper. “By providing municipalities with funding to accelerate planning and delivery processes, the government is meaningfully helping the process overall, which is a welcomed step in the right direction.”

In regards to the temporary two-year ban on foreign buyers, Royal LePage does not expect the policy to provide material relief to potential homebuyers, as this group does not make up a significant portion of homeowners in Canada. In addition, recreational properties are exempt from the ban.


The Ontario government tabled a new housing bill last month with several initiatives aimed at speeding up municipal approval processes for development and allowing more four-to-six-storey residential buildings. The province also updated the rules of its existing Non-Resident Speculation Tax, increasing the tax from 15 to 20 per cent and expanding its reach from the Golden Horseshoe and Southern Ontario to the entire province.

“While new policies aimed at improving real estate market conditions for buyers will take years to produce results, I commend the Ontario government for taking action to increase supply through needed densification. In Toronto, this will give young homebuyers hope that they will be able to purchase a property in the future,” said Karen Yolevski, chief operating officer, Royal LePage Real Estate Services Ltd. “Potential homeowners should not expect relief from the tax increase applied to non-residents, as foreign buyers make up a small percentage of the total market.”

British Columbia

B.C.’s Minister of Finance, Selina Robinson, recently announced the Homebuyer Protection Period; new legislation that, when implemented, will allow homebuyers a five-day cooling off period, during which they may reconsider their offer, secure financing and obtain a home inspection.

“The new legislation is causing a lot of uncertainty among industry professionals and consumers. With few details revealed, and no clear indication of how this policy will be implemented or monitored and by whom, it is difficult to predict what impact this will have on the market,” said Randy Ryalls, general manager, Royal LePage Sterling Realty. “We believe that with the collaboration of industry leaders, the province would have been able to devise a policy that better serves Canadians during one of the most important decisions of their lives.”

Ryalls added that the cooling off period stands to create more of a supply backlog, and that a mandatory pre-offer period allowing buyers time to conduct due diligence would be more beneficial, as suggested by the British Columbia Real Estate Association.

Nova Scotia

The province released new tax measures within its budget that included a transfer tax of 5 per cent of the property’s value for non-residents who did not move to the province within six months of the closing date. Also included is a property tax of $2 per $100 of assessed value of residential properties owned by non-residents. This will not apply to buildings with more than three units or long-term rentals tenanted to Nova Scotians.

“While we do need a supply solution for Nova Scotians, it’s disappointing that after years of investing significant tax dollars into attracting people and businesses to come to the province, we would make such an unwelcoming gesture to Canadians,” said Matt Honsberger, broker and owner, Royal LePage Atlantic. “Many of the affected group are cottage owners from Ontario who have been enjoying and spending money in Nova Scotia for years.”



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