Canada

Canada’s Real Estate Industry Had Forecast Slow Price Growth In 2022, But Not Anymore

Canada’s real estate industry is ratcheting up expectations for next year. The Canadian Real Estate Association (CREA) is forecasting huge growth for the average home price in 2022. Just six months ago, they had been expecting the boom in 2021 to be followed by slow growth. Now in a market flooded with easy money, they see 12x the rate of growth previously forecast in the summer. 

Canadian Real Estate Prices Are Forecast To Rise 8% In 2022

The latest CREA forecast shows huge growth next year, slow only in contrast to 2021. Canada’s average sale price is forecast to hit $739,495 in 2022, up 7.6% from the previous year. They also see big gains in Ontario (+11.5%), New Brunswick (+11.4%), and Nova Scotia (+11.+2%). BC underperforms at 7.1% growth, but it’s also the most expensive market by a large margin. 

Canadian Real Estate Price Forecast 2022

The average sale price forecast for 2022 in Canadian dollars, as forecast in December, September, and June.

Source: CREA; Better Dwelling.

Even the worst performing real estate markets are forecast to see substantial gains. At the bottom of the average price growth list is Newfoundland (+4.6%), Alberta (+4.7%), and Saskatchewan (5.4%). Just six months ago, this was a totally different story.  

No Growth In Home Prices Was Expected Just Six Months Ago

In the CREA June 2021 forecast, the average sale price was only seen as making minor gains. Canada’s national average had been forecast to hit $681,515 in 2022, up 0.60% from the year before. In case you missed that, the new forecast is about $58,000 higher.  

Canadian Real Estate Price Forecast 2022

The forecast annual percent change in the average sale price of a home in 2022, and historic forecasts for contrast. 

Source: CREA; Better Dwelling.

A similar trend can be observed in the provincial breakdown as well. Growth had been forecast at much lower levels in Ontario (+3.2%), and BC (+1.4%), for example. New Brunswick was seen as leading the market with 7.6% growth. Now the whole country on average is forecast to see growth equal to the best performer in June’s report. 

This is a huge swing in opinion for the real estate industry. Last summer was no slouch for values, as record home sales had been hit. It was reasonable to expect such large growth to be followed with a breather of some sort. Now with easy money persisting much longer than expected, that’s out the window. The threat of higher rates barely registers anymore.

5 Comments

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  • Rusty Shackelford 6 months ago

    To the moon babyyyyy! I wont be happy until a dilapidated 80 year old shack in La Ronge, Saskatchewan goes for $3Million USD and the non-productive industries make up 99% of the Canadian economy.

  • questions guy 6 months ago

    when do the taps close on ‘easy money’?

  • Peter 6 months ago

    Leverage up boys. Debt is your best friend in the new economic era of MMT and QE

  • Jimmy 6 months ago

    “Just six months ago, they had been expecting the boom in 2021 to be followed by slow growth.” – Real estate stated the obvious.

    Along the way, the RE industry realized they need to change what they told everyone. They needed to change the message. Instead of telling people there’d be a drop, they needed to reverse. How could they caitalize on everyone if they scared them off of not buying? They then came back with:

    “Now in a market flooded with easy money, they see 12x the rate of growth previously forecast in the summer. “ – They put the pedal to the metal.

    Just remember; the further away we get from the point where this all started moving in this direction, the less accurate peoples analysis becomes. If anyone tells you they know what’s going to happen and when it’s going to happen, don’t even wait to let them finish what they’re about to say; just run the other way.

    Good luck fellow Canadians. Have a Merry Christmas and a Happy New Year.

    Jimmy

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