No one could've expected that it would take a global pandemic to push the Canadian real estate market into overdrive. In 2020, we saw the sales record at a high, but those records were toppled again in 2021, and as of now, in 2022, the demand still remains at a fever pitch. It's continuing to outstrip the supply of available properties in the market, and the prices are going up.
And when you add in the market inflation on top of this, well, according to the federal government's fiscal update, it will take several years for the market to correct itself and make its way back to pre-pandemic conditions. With each passing month of the present year, prices in the Canadian housing market continue to increase with no signs of slowing down.
In 2021, more than 580,000 homes were bought and sold, and this metric is more than 25.3% from 2020 (552,423 homes were bought and sold in 2020). In the November of 2021, home prices in Toronto increased by 28.3% compared to November 2020.
The average sales price for condominiums had hit an all-time high of $1.163 million which was 21.7% higher than in 2020. The national average saw a rise of 19.6%. Canadian real estate agents agree that the market, fuelled by an all-time low-interest rate and a lessening property supply, shows no signs of slowing down.
So, if you want to or planning to buy a house this year, you may want to take advantage of the extremely low-interest rates. If history is any guide, there is a chance that interest rates will increase by the second half of 2022.
Immigration policies are also driving the market
One of the reasons behind the continuous successive growth of Canada's economy has been its immigration policies. As the Covid-19 pandemic forced many aged Canadians to take up early retirement, it lured the immigrant population to apply for the available job positions. At this time, the Canadian government focused on high-skilled immigrants to bring money and earn enough to compete for housing.
Immigrant families ideally purchase properties in large urban areas, such as Vancouver and Greater Toronto, where real estate prices have risen above $1.12 million (USD 88,000), according to Statistics Canada.
In 2021, the government achieved its lofty goal of admitting 401,000 new permanent citizens. However, it relied heavily on migrants who were already in the country temporarily to do this. In 2022, the government is anticipated to make 411,000 immigrants permanent Canadians under various programs.
As a result, there has been an increase in the number of newcomers coming to Canada and begin seeking permanent residency. This will influence the rental market, as all newcomers are more likely to rent in their first few years.
Hiring professional Canadian real estate agents
They can help you explore the market for different properties.
Assist you with the paperwork.
Make sure that you get an affordable interest rate on your mortgage.
Tailor a contract that meets your financial needs when investing in a property.
For more interesting topics like this, keep an eye on this space. And you can contact the team at Royal Canadian Royalty for any help on the real estate market in Canada.