25 Apr 2022 home price forecast increased after strong Q1
2022 Home Price Forecast Increased After Strong Q1
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 this year compared to the end of 2021, following a supercharged start to the year. As we enter the spring market, buyer hopefuls continue to be challenged by tight competition, due to a chronic shortage of supply, despite a slight increase of inventory hitting the market in some regions.
“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.”
While some properties may be attracting fewer bids than last year, and buyer behaviour is beginning to shift – given the recent increase in interest rates and the expectation of several more to come – listings in popular neighbourhoods that are priced appropriately continue to draw multiple offers and are selling above the list price.
Nationally, the aggregate price of a home increased 25.1% year-over-year to $856,900 in the first quarter of 2022; the highest gain on record since the Company began tracking aggregate prices. When broken out by housing type, the national median price of a single-family detached home rose 26.7% year-over-year to $906,100, while the median price of a condominium increased 19.7% year-over-year to $612,900.21.
Read Royal LePage’s first quarter release for national and regional insights.
First quarter press release highlights:
- 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
- Kingston, Ontario, posts the 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
For Ottawa
The aggregate price of a home in Ottawa increased 19.9 per cent year-over-year to $809,200 in the first quarter of 2022; the highest gain on record since the Company began tracking aggregate prices. Broken out by housing type, the median price of a single-family detached home increased 20.0 per cent to $947,600, while the median price of a condominium increased 9.8 per cent to $432,500 during the same period.
“Ottawa’s real estate market remained strong in the first quarter of the year, and I expect this trend will persist as we enter the spring season,” said Rick Eisert, broker and manager, Royal LePage Team Realty. “A shortage of inventory and increased demand in the region continues to drive price appreciation, resulting in a highly competitive environment for buyers.”
Eisert added that demand is largely driven by migration to the city, as Ottawa has become an increasingly appealing destination due to its strong job market and vibrant city culture. However, first-time homebuyers are facing increasing difficulty purchasing in the region due to high demand and escalating home prices as a result of low inventory.
“First-time buyers are finding it challenging to navigate the market with such strong competition. They are opting to move into condominiums or to areas outside of the city, such as Almonte or Carleton Place, where properties are more affordable. However, home prices in these areas are also increasing rapidly,” Eisert added.
Eisert expects a strong spring market as more inventory becomes available, noting that there are numerous developments underway which may help satisfy some of the pent-up demand in the region.
Royal LePage is forecasting that the aggregate price of a home in Ottawa will increase 13.0 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.
Royal LePage House Price Survey Chart: rlp.ca/house-prices-Q1-2022
Royal LePage Forecast Chart: rlp.ca/market-forecast-Q1-2022
As experienced real estate agents in the Kanata, Stittsville & greater Ottawa area we would be happy to answer any of your questions about the market in your neighborhood or those neighborhoods you are considering to make a move to.