Homebuyers brace for continued price increases and tight competition this spring following double-digit gains in final quarter of 2021

Dated: January 14 2022

Views: 57

JANUARY 14, 2022


Modern living room with indoor plants and dog sitting on the couch

Demand for homes remains high across the country as Canadians continue to prioritize their living space over other purchases. However, housing shortages characterized many urban centres before the pandemic and supply has continued to tighten. Multiple buyers competing for too few properties has resulted in continued upward pressure on prices and buyers who were unsuccessful are strengthening the pipeline of demand. With no supply relief on the horizon, home prices are expected to rise through the spring market of 2022.

“Everywhere, in our largest urban centres, and in the nation’s small and medium-sized towns and cities, new homes are not being built fast enough to satisfy growing demand,” said Soper. “In addition to the slow and expensive regulatory processes that burden builders, construction has been hampered by pandemic-specific challenges, including labour shortages and the increased cost of construction materials as suppliers struggle with supply chain issues. Some developers have been hesitant to commit to new projects.”

The country has been fighting a chronic housing supply shortage since long before the pandemic forced us to repurpose our homes for work, school, dining and entertainment, not to mention an alternative to travel. With more young people than ever before looking for their first home and tens of thousands of newcomers to Canada adding to demand, it has never been more important for policy makers to take steps to address the country’s housing supply shortage crisis.

Those hoping that an increase in interest rates will slow demand or bring prices down may be out of luck. Higher borrowing costs will be coming off historical lows, and the increases may not be enough to offset the significant upward price pressure from inventory shortages.

Nationally, the aggregate price of a home increased 17.1% year-over-year to $779,000 in the fourth quarter of 2021. When broken out by housing type, the national median price of a single-family detached home rose 21.1% year-over-year to $811,900, while the median price of a condominium increased 15.8% year-over-year to $553,800.

Read Royal LePage’s fourth quarter release for national and regional insights. 

Fourth quarter press release highlights:

  • High demand outstripping low inventory at start of 2022 signals further home price gains going into spring market
  • 87% of the report’s 62 regions saw double-digit year-over-year aggregate price growth in Q4
  • 61% of the report’s 62 markets saw a quarterly aggregate price increase of 3% or greater
  • Kingston, Ontario, posts highest year-over-year aggregate and detached home price gains in Canada (38.1% and 44.3%, respectively)
Blog author image

Sophia and Ava von Niebelschuetz

By choosing to work with us you get two passionate Realtors with a combined Real Estate experience of over 40 years. We love what we do; we are in the business for people and take a personal interest ....

Latest Blog Posts

Planning to renovate your home? Here’s what you need to know to maximize your return on investment.

BUYING & SELLINGHOME IMPROVEMENTIf you’re working on a home improvement project – whether for you to enjoy, or in preparation to put your property on the market – you may be

Read More

Gatineau home prices continue to attract Ontarians, despite $90,000 jump in one year

As Gatineau has become a desirable destination for many Ontarians due to its affordable homes, the region recorded a fourth consecutive quarterly aggregate price increase of more than 20 per cent

Read More

$3.3 Million raised for women’s shelters and domestic violence prevention programs by the Royal LePage Shelter Foundation

Through contributions from thousands of Royal LePage agents and supporters, the Royal LePage Shelter Foundation raised $3.3 Million in 2021 in support of women’s shelters and domestic violence

Read More

2022 home price forecast increased after exceptionally strong first quarter

Royal LePage has increased its 2022 forecast following record price gains in the first quarter of 2022. The aggregate price of a home in Canada is expected to be 15% higher in the fourth quarter of

Read More