The national market continues to see tight supply and mounting prices
Sellers are currently in a stronger bargaining position in almost all Canadian housing markets, not just the largest ones, according to RBC Economics.
This has been spurred by consistently tight supply and surging home sales prices, influenced by major markets like Toronto and Montreal, RBC said. Data from the Canadian Real Estate Association showed that the national average home price grew by 21% to reach a new high of $748,450 in January.
“Growth has been slower in the Prairie provinces, but even there the majority of markets have sellers in the driver’s seat,” RBC said.
These dynamics are expected to sustain themselves for much of this year, RBC predicted.
“Markets remain exceptionally tight for now and that should keep a floor under prices in the near-term,” RBC said, while stressing that “deteriorating affordability, rising borrowing costs and increasing housing supply will gradually cool demand and restore some balance back to the market.”
“Plenty of unmet demand remains and will continue to fuel tremendous activity across the country. Still, we expect the Bank of Canada’s rate lift-off to turn down the market’s heat in 2022 as deteriorating affordability sends buyers to the sidelines,” RBC senior economist Robert Hogue said earlier this month. “Higher interest rates and the likelihood of new anti-speculation measures will also prove a tougher proposition for investors.”