Wondering when, if ever, is the right time to buy? Many Canadians are, and the numbers are promising more price increases to come.
The Royal LePage House Price Survey was released on Tuesday, April 19, 2022, and it looks at the state of the Canadian real estate market, giving a comprehensive view of what’s changed year-over-year and what the future market could look like.
According to the new report, the aggregate price of a home in Canada increased 25.1% year-over-year in the first quarter of 2022. That’s the most significant increase since they started keeping records.
Housing prices in Vancouver
Royal LePage said in its report that the aggregate price of a home in Greater Vancouver increased 18.2% year-over-year in the first quarter of 2022. Additionally:
- The median price of a single-family detached home increased 20.7% to $1,870,100.
- The median price of a condominium increased 20.4% to $828,400.
Randy Ryalls, general manager of Royal LePage Sterling Realty, said that “while the supply of listings is beginning to increase, it is happening at a very slow pace.”
Ryalls said Greater Vancouver remains in a strong seller’s market, and listings are being sold quickly.
“These market conditions are self-perpetuating. Lack of supply causes hesitation in sellers who hold off listing their home until they can buy.”
In the City of Vancouver, the aggregate house price increased 14.6% year-over-year in the first quarter of 2022 to $1,478,100. Additionally:
- The median price of a single-family detached home increased 21.7% to $2,665,400.
- The median price of a condominium increased 7.1 % to $835,600.
Vancouver housing prices predictions
Driven by solid buyer demand that’s consistently outpacing supply in virtually every Canadian market, Royal LePage predicts “continued strong seller’s market conditions this spring.”
Phil Soper, president and CEO of Royal LePage, said that “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.”
“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.”
Royal LePage is forecasting that the aggregate price of a home in Canada will increase 15% in the fourth quarter of 2022, compared to the same quarter last year.
They also say Greater Vancouver home prices will increase 15% in the fourth quarter of 2022 compared to the same quarter a year previously.
Homes to get multiple offers
The report points out that listings commonly receive multiple offers before selling above the listing price in popular neighbourhoods.
“There is a notable difference in buyer sentiment and behaviour today,” Soper said.
“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.”
BC’s new “cooling-off” period
According to the report, the potential effects of BC’s new cooling-off period on the market remain unclear.
On Monday, March 28, the province announced that changes introduced to the Property Law Act are paving the way to create a new five-day Homebuyer Protection Period. It’s a direct response to concerns about a high competition market where buyers could feel pressured into submitting offers on homes without having basic conditions met to protect them. When it’s brought in, it could allow buyers time to “reconsider their offer, secure financing and obtain a home inspection,” said Ryalls.
The new rule is one piece of the puzzle contributing to shifts in buyer behaviour in combination with rising interest rates and sustained price increases, according to Royal LePage.
“The new legislation is causing a lot of uncertainty among industry professionals and consumers,” Ryalls said.
“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.”
“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.”
Instead of a cooling-off period, which could create a supply backlog, he suggests that a mandatory pre-offer period that would allow buyers time to conduct due diligence would be more beneficial.