The prices of homes across Canada have eased since March, but prices are expected to continue rising into 2022. The continuous rise in prices is due to a high demand coupled with a lack of supply.
The average price of a home in Canada in August was $663,500 which is 13.3% more than the previous year and 0.5% higher than the previous month, according to a report by the Canadian Real Estate Association. However, the average price of a home in Edmonton in August was $384,874 which is 2.7% higher than the previous year and 1.3% lower than the previous month, according to the Realtors Association of Edmonton.
Since the peak of prices in March, average house prices in Canada have fallen 7.4%. Inventory fell to 2.2 months, which means that it would take 2.2 months to sell all inventory at the current rate of sales. This is significantly lower than the long-term average of approximately 5 months. This makes for a strong seller’s market.
According to analysts, this trend is likely to continue. Rishi Sondhi, an economist with TD Economics stated, “August’s modest dip in the sales-to-new listings ratio notwithstanding, markets have so far been tighter-than-expected in the third quarter … [suggesting] home prices could continue to rise in the near-term.”
what to expect in 2022
High house prices and limited supply are forecasted to slow down activity in 2022 with sales expected to fall 12.1% to 577,000.
Robert Hogue, an economist with RBC Economics wrote “we expect further moderation in the period ahead as affordability issues weigh more heavily on buyers, the reopening of spending avenues take some budget room away from housing and the latest tightening in the mortgage stress test proves a bigger constraint for some”
He added that “widespread price declines aren’t in the cards. Exceptionally tight demand-supply conditions in most markets will continue to provide solid protection against any major price corrections, though we see prices flattening by early-2022.”
Don’t worry, regardless of the forecasted price changes, Edmonton remains one of the most affordable major metropolitan areas in Canada. Edmonton house prices are forecasted to rise only slightly into 2022, then fall in 2023.
However, there is still quite a high degree of uncertainty surrounding these forecasts. Real estate markets are affected by numerous factors and unforeseen changes happen often. The vaccination progress, the state of the economy, elections, and other factors can also impact the accuracy of these forecasts.
Things can change in an instance, so if you want to get into a home before prices change further, give me a call.
– Duane Springsteel