Buyers from Vancouver to Moncton can anticipate facing a strong seller’s market if they’re looking to buy in today’s market, according to the latest numbers from the Canadian Real Estate Association (CREA).
In their January 2022 release, CREA reports that the sales-to-new listings ratio shot up to 89.4% last month, just slightly below the record set last January of 90.2%. For context, the long-term average for this metric sits around 55%.
This means that across the country, new homes are disappearing off the market almost as quickly as they are listed – with almost 90% of the new homes being listed selling within the month. These conditions strongly favour sellers, leading to highly competitive buying conditions where bidding wars and offers well over the asking price have become the norm.
Related Read: Why this might be the best time in 2022 to sell your home
These hot market conditions have continued to put a boil on housing prices in the country. The National Home Price Index Benchmark Price rose 28% year-over-year, bringing the average price across the country to $836,300. When compared to last month, prices are up over $25,000 on average, while sales have remained relatively flat (up 1%) and new listings decline (down 11%).
Industry Leaders are Optimistic for New Inventory this Spring
However, industry leaders are hopeful that with warmer weather will come a crop of new listings that could cool the pent-up demand of buyers who haven’t been successful in getting into the market over the last few months. CREA’s Senior Economist, Shaun Cathcart explains:
“The ideal situation between now and the summer would be that a huge surge of sellers come forward looking to sell in the spring 2022 market. If that were to occur, similar to 2021, we’d likely see a massive number of sales take place which would get a lot of frustrated buyers into homeownership, and we’d likely see some cooling off on the price growth side if those offers are spread across more listings. Those are all things this market needs. It really comes down to how many properties come up for sale in the months ahead.”
When it comes to buyers trying to navigate today’s market, Zoocasa REALTOR Claudio Castro shares, “all the signs are pointing to this spring being a return to a more normal, seasonal real estate cycle where new inventory comes online after March Break. For my buyer clients today, my biggest piece of advice is to stay optimistic – I’m hopeful that we will see more inventory come onto the market in the coming weeks. But, if you find something you love today, ultimately, the right house is the right house. You should still consider making a move if the right property comes along.”
Small Cities Continue to Lead The Pack in Terms of Price Growth
CREA’s latest release shows that price gains have been strongest in smaller towns like Bancroft, North Bay, Kawartha Lakes, and Brantford Region observing year-over-year price gains of over 40%.
Here’s an overview of the local real estate market in five of Ontario’s most impactful areas:
Greater Toronto Area
Toronto is feeling the inventory crunch just as much as any Canadian city, with active listings down to their lowest levels in more than two decades. The national board reports that the average benchmark price crept up 33.2% year-over-year to $1,275,000 in January, making it now more expensive to buy in Toronto than in Vancouver. With 5,635 homes trading hands last month, CREA reports that transactions are down over 18% from last year, which many industry leaders attribute to the historically low levels of homes available for sale constraining the number of sales that can take place in the market.
New listings in Ottawa dipped by 1.9% from January last year, with 1,183 new properties being listed for sale this month. With a 1.9% decrease in sales over January of last year (961, compared to 980) it means the SNLR has decreased 5.3%, now sitting at 77.9%. The benchmark price has risen by 2.4% from last month to $698,300. Buyer demand due to the shortage in housing supply means that prices will likely continue to increase until the housing stock grows.
Hamilton-Burlington home prices continue to break records for residential properties, hitting a new benchmark price of $1,055,400, up 32.7% from January of last year. Sales continue to dip, down 14.8% from last year but this can be attributed to the continued dip in new listings, with only 856 new homes added in January, down 12.6% from last year, as well as the continually low stock, with inventory currently sitting at 0.6 months.
Low inventory is still a major factor in the Kitchener-Waterloo housing market, with only 0.3 months of inventory on the market. The continued scarcity of listings in the region means the benchmark price has risen by 36.9% last year, to a figure of 916,800. And, with 397 sales this month, an improvement of 9.7% on last year’s sales figures, it means the SNLR has increased to 83.4%, up 2.8% from last year.
London St. Thomas
Extremely strong buyers’ demand coupled with a shortage of housing supply continues to put upwards pressure on pricing in the London region, with the MLS HPI edging up to $693,100 at the end of January, an increase of 37.5% from last year. CREA reports that residential new listings are down 7.4% while sales have remained relatively flat, contributing to a strong competitive landscape for buyers with an SNLR of 85.1%.