The average selling price is expected to hit a new record as the market outlook for 2022 is calling for strong home sales in the Greater Toronto Area (GTA). January started off the way December 2021 ended in terms of the relationship between the supply and demand. Home sales were down 18.2% compared to sales in January 2021. New listings were also down by a similar annual rate (down 15.5%, which amounted to the lowest levels of inventory in the last two decades. As a result of the tight market conditions, low inventory and high demands, the average selling price was up by 28.6% year-over-year to $1,242,793.
TRREB MLS Sales & Average Price by Major Home Type (January 1 – 31, 2022)
With immigration into Canada and the GTA is expected to be at or near record levels in 2022 and job creation to remain strong, it means that demand is expected to remain strong. Unfortunately, the supply will likely remain constrained, which will result in sustained competition between buyers.
Looking forward in 2022, the latest polling conducted by Ipsos for the Toronto Regional Real Estate Board (TRREB) showed that the percentage of first time home buyers is likely expected to drop this year with detached homes on the top of the list for buyers. The following summarizes TRREB’s outlook for 2022:
Total home sales reported through TRREB’s MLS® System in the GTA will reach 110,000, representing a dip from 2021, but still a strong result in comparison to previous years.
The average selling price for all home types combined is set to climb to $1,225,000, an approximate increase of 12 per cent when compared to last year.
In addition to labour market conditions and population growth, the prospect of multiple interest rate hikes by the Bank of Canada this year will be an important factor impacting housing markets in 2022. While BoC tightening cycles have historically led to fewer transactions, it is important to remember that home buyers have recently been held to a much higher qualification standard under the OSFI stress test. This could mitigate the impact of higher contract mortgage rates moving forward.
In addition, TRREB’s joint research with the Toronto Region Board of Trade and Maru Public Opinion was conducted into what the ‘new normal’ would look like from business executives and workers. The aim is to provide insights into how real estate needs, employment and work patterns will need to shift in response to the emerging world. Below are a summary of the results:
There is a need for a hybrid of flexible post-COVID working arrangements.
Downtown core offices may not need to accommodate as many people as before COVID as a result of continued working from home.
Policies may need to balance the desire to keep working from home while also making use of the office.
There are many implications for real estate and related infrastructure like transit and economic activity including ancillary spending on retail that will need to be considered in more detail.
We are more than happy to provide any advice and guidance in this incredibly competitive market. Please feel free to reach out to us to get a market evaluation of your home and neighbourhood to obtain an accurate estimate for your property when considering listing your home. Similarly, if in the market to purchase a home, a real estate agent can maintain a pulse on the market values in the neighbourhood being looked into.
It’s our family helping yours!
-Kristina & Rey