Larry Weltman; Larry Weltman

The Canadian real estate market has continued to grow in 2022, with home sales rising 4.6 percent in February.

That’s according to the Canadian Real Estate Association, which also reported that new listings improved by 23.7 percent in the same time period, with the Greater Toronto Area (GTA), Calgary, and the Fraser Valley comprising many of the new listings.

Given the popularity of the Canadian real estate market, here’s some trends to keep in mind if you’re looking to buy a home this year.

People are leaving the big cities

The COVID-19 pandemic made people rethink their living situations. When folks were forced to work from home, many realized they didn’t like the idea of being cooped up in a small condo in the city.

So Canadian home buyers have been seeking out more space, which has sent numerous people from big cities like Toronto into smaller communities like Bancroft, a town with a population of just 4,000. Homes in these kinds of places are much cheaper, but demand is now outstripping the supply.

So if you’re looking to move to a smaller community, be prepared to fight for the home you want.

Parents are helping their adult children buy homes

With the market so hot, real estate observers are seeing an uptick in the number of parents helping their adult children buy their first homes while the getting is good. As the economist Benjamin Tal told The Globe and Mail recently, “You basically see people trying to get into the market before it’s too late.”

This generosity from parents is, in turn, sending prices up, particularly in cities like Toronto.

Housing shortages

There’s been such a housing-buying frenzy in Canada since the pandemic started that the country is running out of housing stock. In fact, according to one report, Canada recently had the fewest houses for sale in at least a quarter century.

This lack of supply, while demand remains strong, has some people wondering if Canada is in a housing crisis. This in turn has led to calls to build more homes in the country, which would be a welcome sight for home buyers – but will not address demand issues overnight.

Canada’s most expensive real estate market

For quite a while, Vancouver was widely known as Canada’s most expensive real estate market. But that has changed.
Toronto recently overtook Vancouver as the country’s most expensive real estate market, according to a recent report by the Royal Bank of Canada.

Toronto grabbed the No. 1 spot not because prices got cheaper in Vancouver, but because prices shot up so high in Toronto. This is another sign of the craziness in the Canadian real estate market.

Prices are expected to continue climbing

RE/MAX projects that Canadian real estate could rise 9.2 percent in 2022. That’s especially intimidating for new Canadian immigrants, who are having a tough time affording property in Canada.

That’s especially relevant because the federal government announced plans in 2020 to bring in about 1.2 million immigrants by the end of 2023 to boost Canada’s economy. Indeed, resident arrival admissions skyrocketed in September 2021, making it the biggest gain in Canadian immigrants in a century.

Interest rates are poised to rise

The Bank of Canada decided to keep interest rates low in January. That means the real estate market will likely remain on fire through the spring – but then rates could be hiked later in the year.

If you’re looking to buy a house in Canada this year, keep an eye on the interest rates and expect competition — you’re not the only one looking.