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Is The Canadian Real Estate Market Safe To Invest?

It’s no secret that the last few years have been a bit of a whirlwind for all industries – including the real estate industry. Thanks to the Covid-19 pandemic, Canada’s real estate market took a big hit in the beginning of 2020. However, when people were forced to work from home, a need for more space arose and a surge in home sales, combined with low inventory, shot home prices up by 13 percent! In 2021, costs continued to rise another 21 percent, while housing supply remained an issue. The national average rose to about $686,000, with busier cities such as Toronto and Vancouver continuing to rise to an average of nearly $1 million in 2022.

So, with all of that information, the question remains: Is now the right time to invest in the Canadian real estate market? In this article, we’ll explore the statistics and predictions of the 2022 market and try to find an answer to that question.

Housing Prices Across Canada

To begin, let’s take a look at the average home costs in different regions of Canada. The Canadian Real Estate Association provides the numbers of the general cost of buying a home in each province. Here’s what they have to say about home sales within the last year:

  • Ontario homes sold for an average of $922,580, with properties in the Greater Toronto Area selling for an average of $1.10 million.
  • British Columbia homes sold for an average of $992,844, with properties in Metro Vancouver selling for an average of $1.172 million.
  • Property costs in Edmonton and Calgary increased by 6 and 5 percent.
  • Newfoundland and Labrador was the most inexpensive place to buy real estate with an average cost of $272,964.

As you can see, housing costs vary depending on the area of Canada you’re looking to buy. More populated areas such as Toronto, Edmonton, and Vancouver tend to have a higher cost of living, while less populated regions such as Saskatchewan and the Maritimes tend to be lower. 2021 saw a great increase in housing costs, with a record low supply of real estate and it doesn’t seem like 2022 is going to be much different.

Profitability in Real Estate

Multi-unit housing has become an increasingly popular form of income for many Canadians. Based on last year’s statistics regarding demand and costs, it seems like this trend isn’t going to stop anytime soon. If you’re looking for an investment that will continue to grow in the future, buying apartments or townhomes may be your best bet.

If you’re hoping to make a profit from real estate in 2022, multi-family housing or commercial properties are an excellent investment. Now is a great time to break into this niche of real estate, as many Canadians wishing to live in bigger cities may not be able to afford purchasing a home so they turn to rental options instead.

In the coming year, it’s estimated that there may be tighter monetary policies as hinted by the Bank of Canada. Rising bond yields, higher mortgage rates, and fixed high-ratio mortgage rates, which have already risen over the summer and late into 2021, could impair housing affordability. This is enough to turn potential home-buyers into renters.

What Could 2022 Bring to Canadian Real Estate?

There are many speculations on what 2022 will bring to the Canadian real estate industry. Experts are predicting that the rapid climb in housing prices may stabilize, if not increase more minutely than the previous year. That, combined with the current low mortgage rates, creates the ideal time to purchase a home.

The Canadian savings rate has changed significantly since the start of the Covid pandemic, exceeding 20 percent in the summer of 2020 and remaining in double digits in late 2021. This means that there is a wealth of well-qualified borrowers who can enter the housing market or upgrade the home they currently own.

The toughest part of being a buyer in 2022 is the housing supply. Record low inventory makes for a very competitive market, which has contributed to the record high home sales. While these statistics should not discourage potential homeowners, it should serve as a reminder that there is still a lack of properties on the market. The housing supply has been low for over 3 years now and without any sign of increasing in 2022, this trend could continue until 2023.

Let’s take a look at Vancouver, specifically. The large city in British Columbia began 2022 with an all-time low housing supply, with an inventory of just 12,179 units. This was a 41 percent drop from the beginning of 2021. It’s no surprise then, that housing costs in this area have skyrocketed and don’t seem to be coming down any time soon. These numbers have popped up all over Canada, mainly in the larger, more densely populated cities. If you’re considering waiting it out until next year, you may find yourself waiting a long time for inventory to pick up.

As you can see, there are many things to consider when it comes to investing in the Canadian real estate market. Whether you’re looking to buy a property for yourself or as an investment, it’s important to do your research and understand what’s happening in each province. Keep in mind that the market is constantly changing, so make sure to stay up-to-date on the latest news. With a little bit of luck and some good timing, you may be able to make a healthy return on your investment in 2022!


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About the Author

Kaya Wittenburg

Blog Author and CEO

Kaya Wittenburg is the Founder and CEO of Sky Five Properties. Since the age of 10, real estate has been deeply ingrained into his thoughts. With world-class negotiation and deal-making skills, he brings a highly impactful presence into every transaction that he touches.

He is here to help you use real estate as a vehicle to develop your own personal empire and feel deeply satisfied along the way. If you have an interest in buying, selling or renting property in South Florida, contact Kaya today.

Feel free to call me at: (305) 357-0635
or contact via email: [email protected]