High house prices at the end of the year suggest a market for hot springs: Survey


The last quarter of the year is traditionally the slowest in real estate. But last year’s record sales and prices broke the tradition to the end, according to the Royal LePage House Price Survey.

It shows that more than half of Canadian real estate markets – 61 percent – saw a quarterly increase of 3 percent or more in the last quarter, including a 4.1 percent increase in the Toronto area. Among 62 regions surveyed, 87 percent experience double-digit annual growth in house prices in the fourth quarter of 2021.

It heralds a busier spring than usual, said CEO Phil Soper. Thanks to the reintroduction of pandemic restrictions, he expects that the coming season will look like a less hectic version of last year – “Too many buyers, not enough housing, more offers, upward pressure on prices.”

Some of it would have happened regardless given the lack of supply and burning demand for property, he said. But if people were suddenly free to go back to restaurants, the office and their usual activities, “savings would start to return to normal and they would not have cash burning a hole in their bank account that seems to find its way for renovations or new properties if you can find a home. ”

Soper said this winter’s market feels calmer than last year’s.

“There was a strange desperation in the air when 2021 started. People trudged out in snowstorms to look at non-winter huts because they felt that if they did not, the door would close to the possibility of life,” he said.

Royal LePage predicts a 10.5 percent increase in house prices nationally by 2022 – 11 percent for the Toronto area.

Soper says an expected rise in interest rates this year will not be enough to deflate the market.

“We are moving from almost free money to very low interest rates. Even a significant increase in borrowing costs will still leave us in an area with very low interest rates, ”he said.

With the introduction of the mortgage stress test since the last expansion period 2016-2017, consumers have a buffer zone which The mortgage stress test requires that loans qualify for a higher interest rate than the loan they actually have to pay.

“Somewhere in the range of 90 percent of new mortgages written last year, people should qualify for the full 5.25 percent specified by the Bank of Canada, which is more than double the best interest rates you can get. “So we are looking at … a large group of buyers who have proven able to handle these increases,” he said.

When the market corrects – Soper expects it to in the second half of this year or next year – he says the change will be dampened by the formation of new households by migrants and adults moving from their parents’ homes, housing shortages and the reality that people will still need a place to live, whether they rent or buy.

The house price survey, released Friday, is based on proprietary data.

It shows that GTA’s median house price rose 17.1 percent year over year in the fourth quarter to about $ 1.12 million. The percentage increase matches the national average, but the Canadian median price is much lower at $ 799,000.

The overall housing price, including all houses and condominiums, was less dramatic in the city of Toronto than the surrounding communities. While housing in Toronto rose 8.1 percent annually to $ 1.4 million in the fourth quarter, Markham, Oakville, Oshawa and Richmond Hill all saw median price increases year-on-year closer to 30 percent.

The median price for a GTA condominium rose 14.8 percent year-over-year to $ 665,400 in the last quarter.

Brampton recorded the largest GTA gain, up 29.5 percent in the fourth quarter compared to last year with a median price of $ 1.08 million.

It also showed the largest annual increase in detached houses, the most sought-after pandemic property. The median price for a house in Brampton in 2021 was $ 1.28 million – an increase of 34.3 percent over 2020. It was followed by Milton with a gain of 29.9 percent to $ 1.34 million; Vaughan, a 28.9 percent increase to $ 1.6 million; and Oshawa, where detached houses cost 28.7 percent more last year to $ 906,600.

Within the city limits of Toronto, where prices still exceed most of about 905 with an average of $ 1.59 million last year, the annual increase was 12.5 percent.

Kingston had the highest total house price gain of 38.1 per cent. A home there that cost $ 523,000 in 2020 rose to $ 722,100 in 2021. A detached house in Kingston rose 44.3 percent to a median, $ 780,600.

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