In a case of déjà vu, the spring housing market is poised for continued price growth.
“It has been a busy winter in the housing industry and a very busy spring looms ahead,” says Royal LePage president and CEO Phil Soper.
According to the Royal LePage House Price Survey, the aggregate price of a home in Canada increased 17.1 per cent year-over-year to $779,000 in the fourth quarter of 2021.When broken out by housing type, the national median price of a single-family detached home rose 21.1 per cent year-over-year to $811,900, while the median price of a condominium increased 15.8 per cent year-over-year to $553,800.
The aggregate price of a home in the Greater Toronto Area increased 17.3 per cent year-over-year to $1.1 million in the fourth quarter of 2021. Broken out by housing type, the median price of a single-family detached home increased 22.4 per cent to $1.4 million, while the median price of a condominium increased 14.8 per cent to $665,400 during the same period.
In the City of Markham, the aggregate price of a home increased 28.6 per cent year over year to $1.321 million in the fourth quarter of 2021. Broken out by housing type, the median price of a single-family detached home increased 20.8 per cent year-over-year to $1.596 million, while the median price of a condominium increased 32.3 per cent to $743,400 during the same period.
Canada’s chronic housing shortage pre-existed the pandemic and with growing household formation and more newcomers to Canada adding to demand, affordability threatens to erode again. Canada’s inflation rate, meanwhile, reached an 18-year high at the end of 202 and the Bank of Canada is expected to begin increasing its overnight lending rate incrementally later this year, which would result in higher mortgage rates.
“Many industry watchers expect the inevitable rise in borrowing costs will abruptly end the current seller’s market with its characteristic rising home values,” says Soper.
While rising interest rates slow house price appreciation, higher borrowing costs will be coming off historical lows and the increases may not be enough to offset the significant upward price pressure from Canada’s housing supply crisis, Royal LePage warns.
