According to the Bank of Canada, inflation, at 4.7% in 2021, will remain high until the first half of 2022, at which point it will begin decreasing towards the 2% target set for the second half of the year.
2: Interest rates
According to the National Bank, there will be a gradual increase in interest rates during 2022.
For those who wish to buy in 2022, it is strongly recommended to quickly obtain a bank pre-qualification from your financial institution, to get ahead of rate adjustments.
At Équipe Mark-Andre Martel, we work with excellent mortgage brokers affiliated with various banks, who can help you lock down a good rate.
1: Are we in a real estate bubble?
According to the Montréal CMA forecast, the total number of residential sales is expected to drop by 14% due, in large part, to recent increases in property prices, rising interest rates, and the lack of inventory. Lack of inventory will become even more important in 2022. This last point will keep prices stable, with a very moderate increase of 1% for single-family homes and 3% for condominiums.
That being said, the question remains: Are we in a real estate bubble?
According to economists, we are currently in the third stage of a bubble. *see chart below
In the third phase two options are possible: Either the market will stabilize, and we will see a plateau correction in prices; or, we will fall into the fourth stage, which is the bubble proper, with the associated risks.
However, from our observations, and current data, we believe that the market will stabilize in 2022.
We have already started to see this trend in the last few months, and expect that regulatory responses, such as the gradual raising of rates, will consolidate this stabilization.
Finally, low inventory, representing increased demand, will prevent prices from falling.
Here is a list of our representatives by financial institution:
- Steve Vallières, BNC
- Hussein Kraidli, RBC
- Jean Sebastien Niding, Desjardins
- Mathieu-Alexandre Poupart, Mortgage Broker