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The demand for housing continues to grow and supply remains the biggest issue. Potential buyers sat on the sidelines for much of the second half of 2022 awaiting further price declines, while sellers held off listing unless they had to move hoping to capitalize on the high prices their neighbours received early last year.
“Canada’s housing market closed out 2022 much as expected,” said Phil Soper, President and CEO of Royal LePage. “Activity levels were down sharply compared to the hypercharged state we experienced during the pandemic, with home prices flattening or showing modest declines. While the red-hot market conditions are behind us, there remains a widespread shortage of homes in Canada that cannot be offset by temporarily cooling demand. Many sidelined buyers are waiting patiently for the bottom to be revealed. Once interest rates stabilize and consumers adapt to their new normal, many of today’s sidelined buyers will be back – sooner than many analysts are predicting.”
According to the Toronto Regional Real Estate Board (TRREB), the average selling price for 2022 was $1,189,850 – up 8.6 per cent compared to $1,095,333 in 2021. These gains were largely attributable to strength early in the year. There were 75,140 sales reported through TRREB’s MLS System in 2022 – down 38.2 per cent compared to the 2021 record of 121,639. Last month’s new listings totalled 4,074, down 21.3 per cent compared with 5,177 in December 2021.
The Bank of Canada just raised its policy rate to 4.5 per cent (an increase of 25 basis points). This is the highest the Bank of Canada’s key rate has been since 2007. Several important factors will continue to support home prices, including high levels of employment, strong household savings, and growing household formation, both organically from our millennial and older generation-z cohorts, and through record immigration rates.
Now more than ever, having an experienced real estate team by your side is crucial. With over 30 years of experience, the Dan Cooper Group possesses a wealth of knowledge, steadfast work ethic and unparalleled service that delivers results. We are full-service real estate experts and our clients are at the heart of everything we do. Get in touch today!