Despite interest rates going up, Royal LePage is still predicting a steady rise in Canadian home prices, with solid growth also seen in the London, Ont., region.
The real estate company predicts that demand coupled with low inventory will cause home prices in Canada to increase by 15 percent in 2022.
Local Royal LePage realtor Roger Caranci said that despite an increase in the number of listings hitting the market, there are still many people out there looking.
“You’ve got the issue with interest rates starting to rise, so people are starting to say, you know what, if we don’t buy now, then we may not be able to afford later,” he said.
“One of the key factors I think that has driven things is that interest rates are still considered very low, and people will continue to buy. You’ve got those looking for their first home, you’ve got people that are looking to upgrade into a larger home, and you’ve got investors that are out there, and it keeps going.”
Royal LePage is reporting that the average home price is up just over 25 per cent year over year in the first quarter of 2022, with the average home price now sitting at $856,900.
“Entering 2022, we had anticipated a strong first half and moderating real estate markets thereafter. Call it buyer fatigue or easing demand, these periods of uncomfortably high home price appreciation do run their course. We are seeing the first signs of moderation in some regions, as more inventory is becoming available and competition eases slightly,” said Phil Soper, president and CEO of Royal LePage.
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Caranci said several things will lead to prices in the London region continuing to rise, like the announcement from Amazon last year that it would be opening a facility in London and other announcements like this leading to an increased demand for housing in the community.
He also notes that the supply of single-family homes in the city is still very low, causing the price of land to be increasingly high as buyers still want a house with a yard.
“I personally do not see home prices going down. You may see a levelling off home prices in this area, especially in the City of London, and everybody will tell you, they have been undervalued for many, many years, and it’s kind of like, catch up now is what we’re playing,” Caranci said.
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