Even after shattering all sorts of records in 2021\u2014for high sales and prices and low inventories\u2014Canada\u2019s housing market isn\u2019t about to buckle. Plenty of unmet demand remains and will continue to fuel tremendous activity across the country. Still, we expect the Bank of Canada\u2019s rate liftoff to turn down the market\u2019s heat in 2022 as deteriorating affordability sends buyers to the sidelines. Higher interest rates and the likelihood of new anti-speculation measures will also prove a tougher proposition for investors. In all, we expect 579,600 existing Canadian homes to change hands this year. Though down 13.1% from the astounding 667,000 transactions in 2021, that\u2019s still the second-highest amount in history. The ongoing construction boom will bring much needed new supply to the market, helping to ease severe shortages. <\/p>\n
Most of that increase in supply and cooling of the market will take place in the second half of this year. We expect demand-supply conditions to become much less favourable\u2014though still broadly positive\u2014for sellers by then, reducing upward pressure on prices. We think this will slow the pace of price appreciation, but not alter the direction (with some possible local exceptions). We project Canada\u2019s benchmark price to rise 6.2% in 2022 or nearly a third of the record rate of 17.8% last year. The momentum will be even slower in 2023 with most markets returning to better balance. <\/p>\n