The news hasn’t changed much throughout the first quarter of 2022. However, there was an unusual dip in prices between February 2022 and March 2022. While this can be attributed to several things like buyer fatigue from the fiery start to 2022, rising interest rates, and international instability/uncertainty, it’s also important to keep in mind that although there was a mild price dip because condo apartment sales were at a higher volume. This brought the average sale price down. We should continue to see a bit of price relief into April though, as traditionally this is the time of year that inventories tend to rise. We are also seeing a slowdown from the intensity of January and February.
We now sit at $1.3 million for the average 416 house price ranging from $808K for a condo apartment to close to $1.7 million for a detached house, and from $760K for a condo apartment to $1.6 million for a detached house in the 905 area. This speaks volumes about why more condos were purchased, with a price difference of almost $900K on average.
The bigger news is the federal budget, where the changes were less than impressive. A new Tax-Free First Home Savings Account allows first-time buyers under 40 to save up to $40,000 towards a down payment. The other two pieces were slight changes to existing programs: doubling the First-Time Home Buyers’ Tax Credit to $10,000, and extending the First-Time Home Buyer Incentive until March 31, 2025.
Money was also dedicated to affordable housing, with $4 billion going to the Canada Mortgage and Housing Corporation (CMHC) over a five-year period to build 100,000 net new housing units. They also plan to implement a Home Buyers’ Bill of Rights to end blind bidding and create a completely transparent bidding process. Read more about this here.
Overall, this plan helps Canadians who can already afford a home, or at least can afford to save up to $40,000. This still leaves lower income earners out in the cold, with little being done to build affordable housing or provide a leg up to those who can’t even get started on saving for a down payment. As it stands, 9 out of 10 Canadians can no longer afford to purchase a home. In addition, these programs do the opposite of what we need — they increase demand when we desperately need more inventory.
Photo by Akshay Chauhan on Unsplash
