Canadian Real Estate Prices Expected to Rise 9.2% in 2022: RE/MAX - RE/MAX News

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Canadian Real Estate Prices Expected to Rise 9.2% in 2022: RE/MAX – RE/MAX News

Published

2 years ago

December 1, 2021

Harry Miller

Confidence continues in Canadian real estate market, with the inter-provincial relocation trend likely to remain strong in 2022

Migration between provinces expected to continue in 2022, potentially impacting local Canadian real estate conditions, according to 53 per cent of RE/MAX brokers (20 out of 38)
49 per cent of Canadians believe the housing market will remain steady in 2022 and view real estate as one of the best investment options over the next year
Some of the highest outlooks are anticipated for Atlantic Canada, with Moncton and Halifax projecting average residential sales prices to increase by 20 per cent and 16 per cent respectively in 2022
95 per cent of regions (36 out of 38) surveyed are likely to remain seller’s markets in 2022

Toronto, ON and Kelowna, BC, December 1, 2021 – RE/MAX is anticipating steady price growth across the Canadian real estate market in 2022, with inter-provincial migration continuing to be a key driver of housing activity in many regions, based on surveys of RE/MAX brokers and agents, as reflected in the 2022 Canadian Housing Market Outlook Report. The ongoing housing supply shortage is likely to continue, putting upward pressure on prices. As a result of these factors, RE/MAX Canada estimates a 9.2-per-cent increase in average residential sales prices across the country*.

“Based on feedback from our brokers and agents, the inter-provincial relocation trend that we began to see in the summer of 2020 still remains very strong and is expected to continue into 2022,” says Christopher Alexander, President, RE/MAX Canada. “Less-dense cities and neighbourhoods offer buyers the prospect of greater affordability, along with liveability factors such as more space. In order for these regions to retain these appealing qualities and their relative market balance, housing supply needs to be added. Without more homes and in the face of rising demand, there’s potential for conditions in these regions to shift further.”

Despite the global pandemic, many Canadians still feel confident in the real estate market. According to a Leger survey conducted on behalf of RE/MAX Canada, 49 per cent of respondents believe Canadian real estate will remain one of their best investment options in 2022 (59 per cent of homeowners vs. 34 per cent non-homeowners which included renters, those not looking buy, and those currently looking to purchase). Additionally, 49 per cent of respondents are confident the Canadian real estate market will remain steady next year.

“Canadians recognize the value and investment potential in their homes. However, market challenges such as rising prices and limited supply have impacted local markets from coast-to-coast, causing angst this past year among those looking to get into the market and those hoping to move up in it,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Despite this, it’s encouraging to see that many are feeling confident in the housing market in 2022 and view Canadian real estate as a solid investment.”

2022 Regional Canadian Real Estate Insights

RE/MAX brokers and agents in Canada were asked to provide an analysis of their local market in 2021 and share their estimated outlook for 2022. Based on their insights, 95 per cent of Canadian real estate markets are expected to favour sellers, impacted by limited housing supply and high demand.

WESTERN CANADA

The Calgary and Edmonton markets shifted from balanced conditions in 2020 to seller’s markets in 2021, which brokers and agents in the region expect to continue into 2022. This is attributed to heightened demand prompted by the inter-provincial migration trend that took place throughout 2021, which saw many homebuyers from Ontario and British Columbia driving demand high, while supply remained low.

In addition to an increase in out-of-province buyers flocking to Edmonton, the region has also welcomed investors who found themselves priced out of other markets. RBC’s provincial outlook for Alberta puts this province ahead of all others in terms of economic growth in 2022, which should bode well for homebuyers and investors alike 2022.

Regions such as Victoria, Nanaimo, Regina and Kelowna also experienced an influx of buyers in search of larger properties and greater affordability, which is likely to continue pushing demand and prices up in 2022. This trend has notably increased demand for single-family detached homes and in some regions, condos as well, which may continue in 2022.

Despite some buyers choosing to move away from urban centres such as Vancouver/Greater Vancouver in favour of suburban areas within British Columbia, or leaving the province entirely, Vancouver/Greater Vancouver has remained a quality place to live. The region continues to draw interest from Canadian and international buyers, a trend that is likely to grow next year, in tandem with rising immigration. Vancouver/Greater Vancouver is expected to remain a seller’s market in 2022, providing inventory stays tight and current demand continues, according to a RE/MAX broker in Greater Vancouver Area.

Winnipeg is a slight outlier in Western Canada, with a buyers’ market that is anticipated to continue in 2022. Young couples enjoying the freedom to work from home have been driving much of the demand in the region, especially for one- and two-story detached homes. The appeal of Winnipeg has had less to do with affordability, and more with lifestyle shifts such as hybrid working environments.

ONTARIO

According to the RE/MAX broker network in Ontario, market activity across the province is anticipated to remain steady in 2022, with continued average price growth, although at widely varying degrees. RE/MAX brokers anticipate average sale price increases in smaller markets such as North Bay (four per cent); Sudbury (five per cent); Thunder Bay (10 per cent); Collingwood/Georgian Bay (10 per cent); and Muskoka (20 per cent), where the move-over trend has remained strong. Meanwhile, in larger markets within the province, there’s a possibility that more immigration could weigh on supply levels and prices, including Ottawa (five per cent); Durham (seven per cent); Brampton (eight per cent); Toronto (10 per cent); Mississauga (14 per cent).

When it comes to price appreciation year-over-year, there are a few regions that stood out in 2021 for their exponential increases across all property types, including Brampton, which rose from $869,107 in 2020 to $1,085,417 in 2021 (25 per cent); Durham from $706,818 in 2020 to $914,48 in 2021 (29 per cent); and London from $487,500 in 2020 to $633,700 in 2021 (30 per cent). In comparison, Toronto experienced a modest seven-per-cent increase year-over-year ($986,085 in 2020 to $1,054,922 in 2021).

: Sault Ste. Marie, ON

: Windsor, ON

: Thunder Bay, ON

: Collingwood & Southern Georgian Bay, ON

: Sudbury, ON

: North Bay, ON

: Grand Bend, ON

: London, ON

: Kitchener-Waterloo, ON

: Niagara, ON

: Hamilton, ON

: Burlington, ON

: Oakville, ON

: Mississauga, ON

: Brampton, ON

: Toronto, ON

: York Region, ON

: Barrie, ON

: Muskoka, ON

: Durham Region, ON

: Peterborough & The Kawarthas, ON

: Kingston, ON

: Ottawa, ON

ATLANTIC CANADA

All of Atlantic Canada’s regions analyzed are currently seller’s markets, with potential for average sale prices to increase between five to 20 per cent in 2022, according to RE/MAX brokers and agents. Larger urban centres including Moncton, Fredericton, Saint John, Halifax, Charlottetown and St. John’s have all experienced an influx of out-of-province buyers, especially from Ontario, moving to the region in search of greater affordability and liveability.

Due to this spike in demand, much of the region has experienced increasing competition, especially among single-family detached homes and condos in some cities. There’s a possibility that this may further be amplified as immigration continues to grow in the region.

According to RE/MAX brokers and agents in the region, new construction is anticipated to remain strong into 2022, although construction activity may be dampened by ongoing supply shortages and delays in permits related to the pandemic backlog.

Seller’s market conditions are expected to prevail across the region in 2022, with the exception of Charlottetown and Southern Nova Scotia, which may return more to a balanced state as activity gradually begins to decrease.

These factors have led to some of the highest price outlooks in the country, with Halifax and Moncton projecting estimated average residential sales price to increase by 16, and 20 per cent respectively.

Additional findings from the 2022 Canadian Housing Market Outlook Report

Two-in-five Canadians trust their agent to advise them during the current real estate landscape (43 per cent)
23 per cent of Canadians now have a greater desire to build their own home or buy pre-construction
26 per cent of Canadians have the desire to purchase a home while mortgage rates remain low
62 per cent of Canadians currently own a home. This is higher among those ages 35+ (70 per cent) compared with Millennials, ages 18-34 (42 per cent)
The majority of Canadians (72 per cent) said rising home prices did not impact their purchasing decisions in 2021.

About the 2022 Housing Market Outlook Report

The 2022 RE/MAX Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at REMAX.ca. The overall outlook is based on the average of all regions surveyed, weighted by the number of transaction in each region.

*2020 average residential sale price numbers were full-year, 2021 were from January 2021 – October 31, 2022.

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,554 Canadians was completed between October 29-31, 2021 using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.

About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in over 8,600 offices across more than 110 countries and territories. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.

Forward looking statements
This report includes “forward-looking statements” within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company’s results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company’s business, the Company’s ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company’s ability to attract and retain quality franchisees, (6) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company’s ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

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Proposed Toronto condo complex seeks gargantuan height increase – blogTO

Published

5 hours ago

April 22, 2024

Harry Miller

A large condo complex proposed in the increasingly condo-packed Yonge and Eglinton neighbourhood is planning to go much taller.

Developer Madison Group has filed plans to increase the height of its planned two-tower condo complex at 50 Eglinton Ave. W., from previously approved heights of 33 and 35 storeys, respectively, to a significantly taller plan calling for 46- and 58-storey towers.

The dual skyscrapers will rise from a podium featuring restored facades of a heritage-designed Toronto Hydro substation building.

As of 2024, plans for high-rise development at this site have been evolving for over a dozen years, first as two separate projects before being folded into one. The height sought for this site has almost doubled in the years since first proposed, and it shouldn’t come as a huge surprise for anyone tracking development in this part of the city.

Early 2024 design for 50 Eglinton West before current height increase request.

Building on a 2023 approval for towers of 33 and 35 storeys, the developer filed an updated application at the start of 2024 seeking a slight height increase to 35 and 37 storeys.

Only a few months later, the latest update submitted with city planners this April reflects the changing landscape in the surrounding midtown area, where tower heights and density allotments have skyrocketed in recent years in advance of the Eglinton Crosstown LRT.

April 2024 vision for 50 Eglinton Avenue West.

The current design from Audax Architecture is a vertical extrusion of the previous plan that maintains all details, including stepbacks and material details.

That updated design introduced in January responds to an agreement that allows the developer to incorporate office space replacement required under the neighbourhood plan to a nearby development site at 90-110 Eglinton East.

According to a letter filed with the City, “As a result of the removal of the on-site office replacement, which altered the design and size of the podium, and to improve the heritage preservation approach to the former Toronto Hydro substation building… Madison engaged Audax Architecture and Turner Fleischer Architects to reimagine the architectural style and expression of the project.”

A total of 1,206 condominium units are proposed in the current version of the plan, with over 98 per cent of the total floor space allocated to residential space. Of that total, 553 units are planned for the shorter west tower, with 653 in the taller east tower.

A sizeable retail component of over 1,300 square metres would animate the base of the complex at Duplex and Eglinton.

The complex would be served by a three-level underground parking garage housing 216 spots for residents and visitors. Most residents would be expected to make use of the Eglinton Line 1 and future Line 5 stations across the street to the southeast for longer-haul commutes.

Lead photo by

Audax Architecture/Turner Fleischer Architects

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Luxury real estate prices just hit an all-time record – CNBC

Published

9 hours ago

April 22, 2024

Harry Miller

In this article

RDFN

Real estate is increasingly a tale of two markets — a luxury sector that is booming, and the rest of the market that continues to struggle with higher rates and low inventory.

Overall real estate sales fell 4% nationwide in the first quarter, according to Redfin. Yet, luxury real estate sales increased more than 2%, posting their best year-over-year gains in three years, according to Redfin.

Real estate experts and brokers chalk up the divergence to interest rates and supply. With mortgage rates now above 7% for a 30-year fixed loan, most homebuyers are finding prices out of reach. Affluent and wealthy buyers, however, are snapping up homes with cash, making them less vulnerable to high rates.

Nearly half of all luxury homes, defined by Redfin as homes in the top 5% of their metro area by value, were bought with all cash in the quarter, according to Redfin. That is the highest share in at least a decade. In Manhattan, all-cash deals hit a record 68% of all sales, according to Miller Samuel.

The flood of cash is also driving up prices at the top. Median luxury-home prices soared nearly 9% in the quarter, roughly twice the increase seen in the broader market, according to Redfin. The median price of luxury homes hit an all-time record of $1,225,000 during the period.

“People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise,” said David Palmer, a Redfin agent in Seattle, where the median-priced luxury home sells for $2.7 million. “They’re ready to buy with more optimism and less apprehension.”

New condo market in Toronto hits 15-year low: 'It is dead' – The Globe and Mail

Published

12 hours ago

April 22, 2024

Harry Miller

Condo construction is shown in Ajax, Ont., on Nov. 30, 2023.Christopher Katsarov/The Canadian Press

New condo sales in the Toronto region dropped to their lowest level since the 2009 financial crisis, with investors balking at lofty purchase prices and higher borrowing costs.

The slowdown has imperilled the construction of homes at a time when governments are desperately trying to spur more building in a bid to make housing more affordable. The cost of housing is out of reach for many Canadian residents with the average monthly rent around $2,000 and the typical home selling for more than $700,000. The pace of home building needs to accelerate to meet demand of a growing population. But the staggering drop in new condo sales will lead to less investment in housing.

There were 1,461 new condo sales in the Greater Toronto and Hamilton Area in the first quarter of the year, according to industry research firm Urbanation Inc. That marked the lowest quarterly amount since early 2009, when the world was reeling from the U.S. housing meltdown and global recession.

“It is dead. I would never use words like this, but I am because it is true,” said Simeon Papailias, managing partner with real estate brokerage REC Canada, whose firm sells new condos, also known as preconstruction condos because they have not been built yet.

Mr. Papailias said his firm used to handle an average of 300 preconstruction sales a day. So far this year, there has been an average of 500 preconstruction sales per month.

The preconstruction condo market started to falter in 2022 as the Bank of Canada raised interest rates to cool inflation. Preconstruction buyers do not take out a mortgage until their condo unit is built and that process can take several years. However, they still need to show developers up front that they can qualify for a loan when the condo building has been completed.

And it’s not just the high borrowing costs. New condo prices have been climbing as developers face higher construction costs. Although prices declined incrementally from the fourth quarter of 2023 to the first quarter of this year, some downtown Toronto projects have been selling for a minimum of $1,800 per square foot. That means a 500 square foot studio would cost $900,000. That is unattractive for prospective homeowners who plan to live in their condo, as well as for investors, who make up the bulk of the preconstruction purchases.

Buyers can find cheaper and larger condos that have already been built. “Existing square footage is so much cheaper. The builders and their future pricing is a huge issue,” said Tuli Parubets, a mortgage agent with Mortgage Scout who works with homebuyers in the Toronto region.

Investors would have to charge more than the going market rental rate to cover their mortgage and other condo-related costs. “It’s very difficult for investors to make the numbers work on buying new condos, given their record high price premium over resales and steeply negative cash flow on rentals,” said Urbanation president Shaun Hildebrand.

Pierre Carapetian, who has sold real estate in the Toronto region for 18 years, said he has steered his clients away from preconstruction homes into the resale market because resale homes are cheaper.

“In the last two years, I have not recommended a single project,” said Mr. Carapetian, who runs his own real estate brokerage. “I could not in good conscience recommend anything at this juncture because it makes no logical sense.”

As a result, demand has crumbled and developers have put projects on hold. Urbanation said since the market started slowing in 2022, it has counted five dozen projects have been put on hold indefinitely. That accounts for 21,505 condo units.

For projects that have been launched, the weak pace of sales is affecting their ability to get financing to start construction. During the first quarter, projects in the preconstruction phase were only 50 per cent sold, on average. That compared to an average of 61 per cent in the first quarter of 2023, and an average of 85 per cent in 2022.

Lenders typically require developers to sell 70 per cent of their units for construction financing. The longer it takes to sell preconstruction condos, the longer it will take to get financing and start construction. That will eventually lead to fewer homes being built.

“No launches, no sales and no starts,” said Mr. Papailias. “It’s absolutely the most vicious cycle.”

The slowdown is occurring as governments try to make it easier for real estate developers to build. The federal government recently announced that it will allow first-time homebuyers to take out a 30-year mortgage for a preconstruction home if they make a deposit that is less than 20 per cent of the home’s purchase price and they pay for mortgage insurance. The old mortgage rules did not allow insured-mortgage borrowers to take out a loan longer than 25 years.

However, given that Toronto region developers typically require a 20 per cent deposit, the longer amortization is not expected to make a big difference in the new home market.

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