Housing market activity in 2022 is expected to moderate relative to record levels of activity in 2021, while remaining stronger than historical levels.
Despite challenges with COVID-19, we are starting to see a turnaround in our job and migration numbers, and while interest rates are expected to rise, they remain relatively low. All these factors are expected to support strong housing demand into 2022.
The biggest question will be whether supply can meet that demand. It will take time for housing to move out of sellers’ market conditions, so we do anticipate prices will continue to rise this year.
Rising lending rates are expected to cool some of the demand later this year, but rates are still exceptionally low, supporting strong housing sales, especially from those who experienced increased savings and equity gains throughout the pandemic. Economic improvements are also expected to support both job and population growth, adding new sources of demand for housing.
As we move through 2022, new listings in the resale market should remain relatively strong thanks to higher home prices. At the same time, the new-home sector recorded a surge in starts last year, and the completion of those starts should help add to overall supply choice in the market.
Supply levels are expected to improve relative to demand this year. However, conditions are expected to remain relatively tight throughout the spring market, supporting further price gains.
As the market balance gradually improves, upward price pressure in the housing market should ease. Overall, price growth is expected to ease to four per cent in 2022.
While conditions in the housing market are expected to remain strong, there is a significant amount of uncertainty that could impact housing. If supply levels remain low relative to demand, we could see stronger-than-expected price growth. On the other hand, if rates rise much faster and higher than expected, it could cause a more significant pullback in sales.