Housing Trends In 2022

Few individuals could have anticipated a health crisis would alter almost every aspect of our life from the beginning of 2021. One thing that never changed was the demand for homes, and the housing bubble did not burst. Quite the opposite is true.

So, what is in store for us in the next few years? Nothing is definite, as we’ve learned from the year 2021. However, we combed through the many markets to analyze the current happenings and summarized the most important conclusions.

As we approach the close of 2022, here are some housing sector trends that our team is keeping an eye on throughout the year.

Inventory is dropping

With a thriving real estate sector, Canada’s home prices are rising, owing in part to dwindling availability. Most condominium owners decided to hold onto their properties till the nightlife resumes to downtown neighborhoods and their properties regain their value. Owners of detached family homes, on the other hand, are not selling because they are content with their current situation.

 Safety and well-being are now a major concern.

Wellness and health have become a more significant element in the real estate business as a whole. Health and well-being are becoming as essential as hygiene and safety. Homeowners associations are recommending new services and sophisticated technologies that offer cleaner buildings, better HVAC infrastructure, touchless entry, sensors, and contact tracking applications as a result of the increased emphasis on personal safety.

18-hour cities continue to fuel housing demand.

The phrase “location is everything” is often used in the real estate industry. Among the most notable consequences of the pandemic was that it forced house purchasers to rethink the importance of location in their property purchase.

With home or remote working alternatives becoming more popular throughout the nation–and some businesses making them permanent – an increasing number of purchasers in densely populated big cities like Toronto are choosing square footage and green areas above office closeness.

Not only has this situation led to a surge in demand for single-family homes in general, but it has also prompted many purchasers to broaden their search outside city borders. Many people are looking for better value in 18-hour cities, which are typically described as “mid-size urban centers with appealing amenities, relatively high population increase, and a cheaper living costs and cost of doing business than the largest metropolitan regions.”

The demand for detached houses has risen.

Although Canadian house prices have risen significantly this year, it’s difficult to ignore the effect of detached house purchases on the market. Because detached houses are already more costly than condominiums, increased demand has boosted total sales volume.

Competition for detached houses is projected to reach new highs through 2022 as families with children want more playing space, home office spaces, and places to socialize after the pandemic has passed.

This is huge news for investors. In most Urban centers this year, it has been a seller’s market, and property owners who are seeking to downsize are seeing increased interest in their detached houses.

In condo-heavy regions, rental demand is on the rise.

Factors such as widespread restrictions to tourists, immigration barriers, the inability of international students to travel back to Canada, and decreased university activities, have seen rental vacancies increasing to 2.8 percent in condo-dense areas like Toronto in the third quarter of 2020. This was up from 0.7 percent the year before and was the highest level in almost a decade. Low demand prompted an influx of new listings and, as a result, a decrease in rental rates, especially in city centers and in regions where short-term leases are typically popular. This situation spilled over into 2022.

As the border gradually opens up and life returns to a more pre-pandemic state due to the vaccination, demand for accommodations and rentals has begun to rise again, especially in metropolitan centers. For the time being. If a tenant expects to live in a gorgeous, fashionable downtown condo in a terrific location, now is a wonderful moment to lock it in.

While the Prairies are suffering, the Atlantic Canada home market is booming.

Canadian homebuyers have been flocking to the suburbs because they are more inexpensive. They’ve also been migrating to more inexpensive territories and provinces. The real estate industry in Atlantic Canada is currently booming. Halifax, Charlottetown, Greater Monton, and Saint John have all had strong performances recently. On the other hand, the Prairies have been hurting as a result of the gas and oil industry’s economic difficulties.

Mortgage rates have stayed affordable.

For most of the year, the Bank of Canada maintained the overnight lending rate at (its “effective lower limit”) of 0.25 percent, with intentions to keep it there until the COVID’s “economic slack” is absorbed. Consequently, mortgage rates have remained at an all-time low, with fixed mortgage rates averaging around 1%. Fixed rates may rise somewhat if the bond market rebounds in reaction to vaccination announcement and implementation.

Bottom line

Every year is different, but the COVID-ravaged days have been unlike anything ever seen in the real estate market before. Nobody could have anticipated that a mere virus could spread throughout Canada, first stalling the market and then pushing prices upward in many areas. However, many markets throughout Canada have seen historically high levels of activity following a brief period of dormancy.