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Royal LePage raises home price forecast to 15% despite cooling


Persistent demand and weak supply outweigh rising mortgage costs for now

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Royal LePage is raising its home price forecast for this year, despite signs of a slowdown in some markets and expectations of higher mortgage rates.

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The real estate brokerage now expects overall home prices to rise 15% in 2022 to $895,900, up from its December forecast.

The new forecast comes after overall house prices rose 25% to $856,900 in the first quarter of this year despite rate hikes by the Bank of Canada, a promising sign that prices will remain high. The price gain was the largest in the first quarter ever recorded by the company.

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“Going into 2022, we had forecast a strong first half and moderation in real estate markets thereafter…We are seeing the first signs of moderation in some regions as more inventory becomes available and competition eases slightly “, said Phil Soper, president and chief. Royal LePage executive in a statement.

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“The first quarter of the year was so strong, however, that we are raising our outlook for 2022,” Soper added. “And home prices will continue to rise in the months ahead due to our continued imbalance between supply and demand.”

Among other signs that a seller’s market remains in many communities, Barrie, Cambridge, Kitchener-Waterloo and Oshawa, cities in Ontario’s Golden Horseshoe region, all broke the $1 million mark for the first time for a median single-family home.

Kingston, Ont., posted the largest year-over-year increase in overall and single-detached home prices in Canada for the second consecutive quarter.

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Royal LePage said it did not expect the measures announced in the latest federal budget to do much about housing affordability. While Soper said the funding to increase supply was a welcome first step, measures such as the two-year ban on foreign buyers would be ineffective because they represented only a small portion of Canadian homeowners.

Stronger cohesion between all levels of government is needed to make housing more accessible to Canadians, Soper said.

“Access to adequate housing is one of the great social challenges of our time,” Soper said. “I’m glad to see it’s being addressed in the federal budget, but the budget requires significant input from provincial and municipal governments to achieve its goal of providing housing for current demand as well as future demand for training new households and immigration.

• Email: shughes@postmedia.com | Twitter:

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