2022 national home price forecasted to end year modestly below 2021 following Q3 price declines
Royal LePage is forecasting that the aggregate price of a home in Canada will decrease 0.5 per cent in the fourth quarter of 2022, compared to the same quarter last year. The forecast has been revised downward, reflecting an expected flattening or modest decrease of prices through the remainder of the year, and following quarterly declines in a majority of Canadian markets in the third quarter.
“September did not bring the typical seasonal lift in the number of homes trading hands in this country, a clear indication that our housing market continues to adjust to higher borrowing costs,” said Phil Soper, president and CEO of Royal LePage. “Home prices follow sales volume trends, which means we will see further softening in the final months of the year. Our revised outlook has national prices at just below where we ended 2021, erasing the gains made in the first quarter of 2022.”
According to the latest Royal LePage House Price Survey, the aggregate1 price of a home in Canada increased 3.3 per cent year-over-year to $774,900 in the third quarter of 2022. On a quarterly basis, the aggregate price of a home in Canada decreased 4.9 per cent in the third quarter; the second consecutive quarterly decline recorded.
The Royal LePage National House Price Composite is compiled from proprietary property data, nationally and in 62 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home rose 2.0 per cent to $806,100, while the median price of a condominium increased 6.1 per cent year-over-year to $566,100. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.
In the third quarter, the aggregate price of a home in Canada recorded an increase of 25.4 per cent over the same period in 2020, and 21.5 per cent over the same period in 2019.
“Home sales volumes have fallen in the face of economic uncertainty and rising rates, but so too have the number of properties available to purchase. With demand and supply falling in tandem, there is limited downward pressure on prices. Canadian home values should end the year well above pre-pandemic levels, retaining much of the gains made during the real estate boom of 2020 and 2021,” said Soper.