No Signs of the Real Estate Market Slowing Down in 2022
Tags: GTA REAL ESTATE UPDATE, TORONTO REAL ESTATE, VAUGHAN REAL ESTATE UPDATE, VAUGHAN REALTOR, TORONTO REALTOR
We kicked off the year with a very hot housing market and there appear to be no signs of it slowing down. In January 2022 demand for housing remained at an all-time high while the supply of new listings was at record low levels.
The record low number of new listings resulted in a drop of 18.2% of the number of properties that sold in January 2022 compared to January 2021. Sales were substantially down last month compared to last year’s January record sales. January 2022 however was the second-best in history for the month of January. The limited supply of new listing and the continued high demand for housing resulted in once again upward pressure on prices, the average sale price in the GTA was $1,242,793 which is a year-over-year increase of 28.6%.
Greater Toronto Area (GTA) January Market Update
The real estate market continued to remain very tight in January 2022. The short supply of new listings and demand for residential real estate remained very strong through the month. Most homes continued to sell in bidding wars. As a result of the low inventory of homes for sale, sales dropped by 18.2% compared to January 2021. We also experienced one of the lowest new listings on record and listings was down 15.5% compared to January 2021.
This continued tight market placed upward sales price pressure on all housing types which resulted in a year-over-year average price increase of 28.6%. However, the entry-level home types saw the greatest price appreciation, year-over-year semi-detached prices were up by 31.5% and townhomes were up by $34.6%. The overall average price for condos was up 24.5% with the suburbs still outpacing the City of Toronto, in the suburbs condos saw a 31.6% increase and the City of Toronto condos saw a 21.7% increase. As we progress through the pandemic the condo market both in the suburbs and the City of Toronto has definitely bounced back.
What to Expect in the 2022 Housing Market
The Bank of Canada in January did not increase the overnight rate from the record low rate of .25%. The expectation is that the Bank of Canada will most likely start to increase interest rates starting in April and it is projected that we will see a total of 3 to 4 rate increases in 2022. However, overall interest rate increases are projected to increase by not more than 1%. Will a 1% interest rate increase dramatically impact the housing market? My opinion is that it won’t as interest rates will still be at record low rates even after a possible 1% increase. Demand for housing continues to remain at an all-time high and a 1% increase will not have a significant impact. The hot market that we are currently experiencing is driven by high demand and very low listing supply which is somewhat normal for this time of year although the listing inventory has been lighter than normal for this time of year. As we get closer to spring I have no doubt the new listings will pick up.
My advice is that now is a great time to sell a property and don’t wait for the spring market. Are you curious what your home or property may be worth in our current hot real estate market? You may be pleasantly surprised! Reach out and it would be my pleasure to answer any of your questions or prepare a market analysis to provide you with a sense of what your home may be worth in this hot seller’s market.