Persistent demand coupled with low inventory drives 2022 home price forecast higher to 15%

According to the Royal LePage House Price Survey released today, the aggregate¹ price of a home in Canada increased 25.1 per cent year-over-year to $856,900 in the first quarter of 2022; the highest gain on record since the Company began tracking aggregate prices. As strong buyer demand continues to outpace supply in almost every market from coast to coast, Royal LePage is forecasting continued strong seller’s market conditions this spring. 

The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home rose 26.7 per cent year-over-year to $906,100, while the median price of a condominium increased 19.7 per cent year-over-year to $612,900. Price data includes both resale and new build.

“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 were attracting fewer bids, listings in popular neighbourhoods that are priced appropriately are still commanding multiple offers and selling above the list price. 

“There is a notable difference in buyer sentiment and behaviour today,” Soper continued. “Consumer confidence is being challenged as the lingering impact of the pandemic and worrisome geopolitical situation in Eastern Europe raise questions about the stickiness of inflation and the trajectory of interest rates. Yet, while there may be fewer bids on accurately priced properties, multiple-offer scenarios are still the norm in most communities.”

Royal LePage is forecasting that the aggregate price of a home in Canada will increase 15.0 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.

 _{¹ Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions and includes both resale and new build.}