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    Everyone’s wondering whether real estate in Toronto and the GTA will go up or down in price, and although no one knows for certain where the market will go these 3 key factors can help provide the insights you need to plan your next move.


    Changes in the Toronto & GTA Real Estate Market 2022:


    According to tradingeconomics.com, the price of new homes in Canada rose by 0.9% over a month-long period in October 2021. Before that, September saw gains of 0.4% which was lower than the market forecast of 0.5%. 

    New houses in the Kitchener-Cambridge-Waterloo area were up in 15 of the 27 census metropolitan areas surveyed.

    This year Ontario has witnessed some of the highest average residential price increases across single-detached homes in the country. The majority of regions in the province are seeing increases between 20 and 35.5% year-over-year.

    The only areas to experience price increases below 20% include Toronto with +14.6%, Thunder Bay with +17.1%, and Mississauga with 19.7%.

    Many Canadians experienced a record year for home price growth. This left lots of people wondering if real estate prices will increase through 2022 as well. Continue reading as we provide some data which to help us shed some light on what to expect from Toronto & The GTA’s real estate market in 2022. 

    A photo of a hand holding a key with a blurred background

    RE/MAX Outlook:

    RE/MAX has also offered their predictions for house prices. According to the RE/MAX 2022 Canadian Housing Market Outlook Report, the average price of homes will be up more than 9%. The report also reveals that almost 95% of local markets are expected to favour sellers in 2022.

    With supply and demand serving as the driving force behind this price growth, the most recent outlook from the Bank of Canada stated that during the third quarter of 2021, “housing activity had been moderating, but appears to be regaining strength, notably in resales.” The demand for homes is only set to grow with immigration putting even more pressure on it. 

    Frank Leo’s Insights on The Real Estate Market in 2022:

    During a recent trip to the grocery store, Frank Leo was struck by the profound increase in the cost of essentials like groceries. It got him thinking about how the same inflation that’s responsible for making groceries more expensive affects the Toronto real estate market. Like groceries and gas, housing is an essential expense we all deal with. 

    Discussing the realization with his team, Frank Leo & Associates identified 3 key factors home buyers and sellers should consider in the following year.

    The 3 Key Factors to Consider if You’re Looking at Real Estate in 2022

    The first factor is pay increases. If employers start giving large pay increases, it will give people more disposable income to purchase homes, clothes, food, etc. 

    However, a substantial increase in purchasing power isn’t likely to keep pace with inflation.

    A photo inside a grocery store with fresh produce and red signs with 'save' written on them


    Second Factor:

    The second factor is a change in interest rates. When interest rates go down it stimulates the market, making money cheaper to borrow. That can result in price increases. With the Bank of Canada giving interest rates at 0.25%, we currently have seriously low interest rates.

    Therefore it’s unlikely for interest rates to go down even more dramatically. However, there have been talks of interest rates going up next year. If they go up it would be negative to the pricing of property as it would be more expensive to borrow money.

    Third Factor:

    The last reason house prices would change is because of inflation or deflation. Deflation would mean prices are going down for goods and services. This would allow you to have more money to purchase property at higher prices, unlike what’s currently happening with inflation. According to tradingeconomics.com Canada’s headline inflation rate rose to 4.7% in October of 2021 from 4.4% in the previous month.

    Now consider that the goods you purchase from stores or online have to be transported by truck. Since the trucks need gas – a commodity that’s also affected by inflation – you can start to see the vicious cycle that emerges.

    What does that mean for the consumer? They have less disposable income to spend on food, gas, clothing, and REAL ESTATE.

    If you are in a position to buy or sell in the near future, it is important to go over the factors that the best realtor in Toronto and GTA provided. The future dictates your decision today, so would waiting to sell your home knowing the three factors result in more or less money? Let us know by clicking Frank Leo & Associates.

    A drone view of a tidy neighbourhood with lush green trees and freshly mowed lawns

    Don’t Take Our Word For It.

    Other experts are weighing-in on the Residential Real Estate Market in 2022:

    A panel from Finder.com asked experts if they believed that Canadian prices would remain the same or decrease next year. Only 24% said yes, 29% were unsure, and 47% said no. The Canadian Economic Director at Oxford Economics, Tony Stillo was one of the minority votes in this panel.

    He explained that “even with plateauing house prices in our baseline forecast, we expect rising mortgage rates will push house prices more than 20% above affordability for the typical Canadian household by the end of 2022 according to our Housing Affordability Index,”

    Stillo believes “the Canadian economy is sufficiently well-positioned for the government to implement policies to engineer a managed correction to national house prices of around 10 to 15% and would realign priced with domestic fundamentals,”