Vancouver Real Estate Outlook for 2022
The year of 2021 was a Sellers market with record activity and rising house prices. The year 2022 will remain a Sellers market through to March 2022 but we expect the activity to slow as we approach the summer months and September through to December calendar months.
The driving factors for a continuing Sellers market are:
- Low interest rates with the potential to increase through 2022.
- A continuing lack of listings offered for sale.
- Gifting.
Potential slowing of market factors are:
- Rising interest rates.
Fading buyer confidence and buyers fatigue.
The initial start of a market correction.
Interest Rates
Housing sales in Canada usually average 40,000 per month. This average increased to 70,000 per month during COVID. We are expecting the average to decrease and stabilize to 50,000 per month in 2022 but likely to increase to 60,000 per month as interest rates rise. The increase is because buyers will rush into the market to take advantage and lock into a low interest rate. Yet, as rates rise this will slow the Canadian real estate market.
Lack of Listings Offered for Sale
The lack of supply of listings is putting pressure on housing prices and driving prices upwards. Multiple offers are the norm in the $500,000 to $2.5 million price range. This will not change until we see a rise in interest rates and an increase in the listing supply. Unfortunately, at this time there is no indication that the supply of listings will increase but interest rates are forecasted to rise and this will be a factor as we approach the Spring of 2022.
Gifting
Gifting is a big positive driving factor in the Canadian real estate market. Thirty three percent of new home buyers are gifted the down payment at an average of $80,000. Ten percent of home buyers that already own a primary residence and want to move up to a bigger home are gifted an average of $100,000. In Vancouver and Toronto, the average gift is much higher. We are currently witnessing the largest transfer of wealth in Canadian history.
1020 Harwood Street Vancouver BC
Summary
In summary, it looks like another busy year in the Vancouver real estate market with the advantage siding with the Sellers. This is my 35th year as a real estate agent and I still love my job because I know I bring a positive advantage to those who hire me. Knowing the market inside and out gives my clients a huge advantage when navigating challenging conditions and hundreds of thousands and millions of dollars in investment. I look forward to speaking with you and thank you for your continuing support and referrals. I really appreciate it and feel fortunate to continue to work for amazing people.
Don Urquhart
Vancouver Realtor for over 25 years
Macdonald Realty
604 787 1210
email: [email protected]