CREA Updates Resale Housing Market Forecast – Yahoo Finance

December 15, 2021 by No Comments

Sales forecast to moderate somewhat in 2022 but tight supply conditions are expected to continue to push prices higher

OTTAWA, ON, Dec. 15, 2021 /CNW/ – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations.

Sales activity, historical, forecast and 10-year average (CNW Group/Canadian Real Estate Association)

Monthly home sales over Canadian MLS® Systems were not as volatile in 2021 as they were in 2020. That said, they were nonetheless still very unstable – similar to what was seen during the 2008-2009 financial crisis – but at a much higher level.

This volatility, ranging from a seasonally adjusted annualized high of 807,250 sales in March 2021 to a low of 585,250 sales in August 2021, then back up to around 650,000 at the time of this writing, was not the result of lockdowns or any major fluctuations in demand.

Rather, with the end-of-month supply of homes for sale setting new record-lows every month this year, it would seem the ups and downs of sales in 2021 had more to do with where and how many properties came up for sale. When they did, the demand was there to scoop them up.

The number of months of inventory has only dipped below 2 months four times in history – in February and March of 2021, and then again in October and November – so it is not surprising that prices nationally rose by more than 20% in 2021 compared to 2020. While price growth is not expected to be as extreme in 2022, many of the conditions that supported it right up until the end of 2021 will still be there on New Year’s Day.

Along with an unprecedented supply crunch, there are quite a few other factors that will play important roles in Canadian housing markets in 2022. Ongoing strong demand from an unobservable but no doubt large number of households waiting for new listings to show up will be one tailwind.

Many of those listings will likely show up as existing owners continue to move around in record numbers in response to the changes to our lives since the emergence of the COVID-19 pandemic. Demand should be further turbocharged by, and buyers will face increased competition from, the return of very strong or perhaps even all-time record levels of international immigration, depending on the evolution of the pandemic.

There will also be headwinds, chief among them …….



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