RE/MAX brokers and agents are anticipating the national average residential sale price in Canada to decline 2.2 percent in the final months of the year (September-December), according to RE/MAX Canada’s 2022 Fall Housing Market Outlook Report.
Central Okanagan home sale prices are expected to decrease 6.5 percent.
This market moderation comes on the heels of rising interest rates, record-high inflation and broader global and economic uncertainties that have impacted consumer confidence and market activity.
“While we are still facing significant housing supply shortages across the country, many markets are experiencing softer sales activity given recent interest rate hikes. This provides some reprieve from the unprecedented demand and unsustainable price increases we’ve seen across Canada through 2021 and in early 2022,” says Christopher Alexander, President at RE/MAX Canada. “However, the current lull in the market is only temporary. Until housing supply increases, these ‘boom’ and ‘bust’ cycles will likely be a recurring event.”
“Despite the fact that nearly half of Canadians are waiting to buy or sell a home, we’re confident that as economic conditions improve by mid-2023, activity will resume,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Timing the market for short-term investment is extremely difficult and rarely successful. But real estate as a long-term investment continues to yield solid returns. If someone needs to engage in the housing market, regardless of those cyclical peaks and valleys, being informed and working with an experienced real estate professional can help consumers clarify some of those unknowns and make the best decision possible.”
Bucking the downward trend, seven out of 30 markets analyzed are likely to experience modest price appreciation between 1.5 and seven percent. Meanwhile, RE/MAX brokers and agents expect a decline in sales this fall, in 18 out of 30 markets surveyed.
In regions such as Vancouver, Victoria, Kelowna and Edmonton, AB, RE/MAX brokers reported rising interest rates as a factor impacting local market activity, resulting in softening consumer confidence, fewer multiple offers from buyers, and a shift toward more balanced conditions between buyers and sellers. In all regions analyzed in Western Canada and the Prairies, with the exception of Calgary and Edmonton, the average residential sale price is expected to decline between zero and 6.5 percent.
Low inventory remains a pressing concern in Kelowna and is expected to place upward pressure on home prices in 2023 and beyond.
In the survey of RE/MAX brokers and agents, 25 out of 30 said rising interest rates have affected activity in their local residential market this year, with some indicating that this has been the biggest factor impacting homebuyer and seller confidence – a trend that is likely to continue for the remainder of 2022. These insights are supported by a new Leger survey commissioned by RE/MAX Canada, which reveals that 44 percent of Canadians agree that rising interest rates are compelling them to hold on buying a property this fall, while 34 percent say they won’t hold.