2021 was a landmark year for the real estate market in Canada. Not only did we see some of the busiest months on record, but we also saw housing inventory drop to the lowest level on record. Across the board, it was a record-setting year too, with prices rising and interest rates at the lowest they’ve been in years.
For buyers, 2021 has been a tumultuous year, to say the least, and if you’ve been following the real estate market closely as we have, you’ll know that buying a home in these conditions is sometimes challenging.
So what does 2022 hold for the real estate market? Only time will tell, but we can make a few assumptions and predictions about what we will see in the new year. In this post, we’re providing our insight and advice on buying a home in 2022.
Let’s get started…
Interest Rates are Rising
One of the biggest drivers of the current market conditions is the low-interest rates we are currently experiencing. Essentially, the Bank of Canada initially lowered interest rates in an effort to help the Canadian economy during the pandemic. As the country’s pandemic recovery continues to improve, regulators have determined that it is now safe to start increasing the rates again.
Expert economists predict that we will see interest rates go up at least three times in the next year or so, with the first jump happening sometime in the spring.
As a buyer, this means you should do what you can to lock in a mortgage rate with your preferred lender sooner rather than later. Most mortgage interest rates can be secured for 30-90 days, so even if you are planning to purchase in February or March of 2022, you should get a head start with your mortgage approval process now to fully benefit from the current low-interest rates.
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The Market Will Remain Competitive
Housing supply remains a significant issue facing today’s buyers. Simply put, there are not enough homes on the market right now to satisfy the demand of buyers who want to purchase. As a result, many homes that are listed for sale sell quickly and often over the asking price. In many cases, listings go into a multiple offer situation where there are numerous buyers vying for the home and competing to present the best offer.
So far, we believe that the supply issue will remain present well into 2022, and therefore, we will continue to navigate a competitive seller’s market.
The best way to find success buying in this type of market is to work with a professional real estate agent who knows sellers in your area and can help you by showing off-market listings and helping you to craft compelling offers that will motivate sellers while also preserving your investment and protecting your best interests.
Looking for your dream home? Check out our featured listings right here.
Tradition is No Longer the Status Quo
Most real estate markets across the country have two distinct ‘busy’ seasons. Typically, the fall market and the spring market are the most active markets in real estate. In fact, many sellers will strategically list their homes at those times because they know that most buyers will be active in the busy periods.
However, after 2021, we can say with some confidence that this decades-old tradition is not as relevant as it used to be. More sellers are choosing to list their homes at a time that works for them on a personal level.
There are many benefits to listing a home for sale in the ‘offseason’, and as a result, buyers need to be available and ready at all times of the year, not just during the traditional fall and spring markets.
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Canadians Will Become More Concerned with Affordability
Limited housing supply and increased buyer demand will continue to contribute to rising prices in the Canadian market. However, at the same time, Canadians are becoming more concerned with affordability.
As a result, homes with investment opportunities such as duplexes and basement apartments might become more popular in the future.
Along with this type of thinking, many Canadians are still looking for homes with more space. Working from home is becoming more prevalent in the wake of the pandemic, and although buyers won’t exit urban markets at the same pace as 2020, we do expect to see many buyers choose to move out of bigger cities like Toronto and invest in smaller communities with more space and lower prices.
The Liberal Party’s Plans
After the federal election from this past fall, we learned a lot about what the Liberal Party has in store for Canadians when it comes to the housing market. The government has promised to implement policies such as a tax-free first-time home buyer savings account, rent-to-own measures, a buyer’s bill of rights, and improvements to the first-time home buyer’s incentive program, and more.
How to Buy a House in 2022
If buying a new home is on your list to do for 2022, the best way to go about it is to work with a professional REALTOR®. In a competitive seller’s market when market conditions are not favourable for buyers, you need someone on your side to help give yourself an advantage.
Professional REALTORS® know the area and the market and can provide you with advice and strategies to appeal to sellers, find your dream home, and successfully buy a house this year.
Want to learn more about buying a home in Canada this year? Download our buyer’s guide here.
