RBC Economics<\/a>\u00a0Thought Leadership report published this week, senior RBC economist Robert Hogue said that property prices \u201creaccelerated further\u201d in major markets during November thanks to strong demand and dwindling inventories.<\/p>\nIn the Greater Toronto Area, \u201caggressive\u201d bidding drove the composite MLS Home Price Index (HPI) up 3.9 per cent from October to $1,173,000. Over the past two months, GTA prices have climbed 2.2 per cent and 4.3 percent, resulting in a $114,000 increase over a three-month period. This exceeds the $99,000 jump in prices that was recorded in the first three months of 2021.<\/p>\n\n
\u201cClearly, affordability is taking a huge hit right now and the situation is likely to worsen when interest rates go up,\u201d said Hogue. \u201cSelf-correcting mechanisms will eventually kick in to rebalance the market though exceptionally tight supply is poised to keep prices on an upward trajectory in the near term.\u201d<\/p>\n
A similar story unfolded in Western Canada last month. Bidding wars in Vancouver pushed the MLS HPI up one per cent from October and 16 per cent year-over-year, a trend that marked a \u201cfurther acceleration in prices.\u201d<\/p>\n
By housing type, the MLS HPI for Vancouver condo apartments jumped 11.4 per cent annually and 9.5 per cent from October, while single-family homes reported a 20.8 per cent and 20.5 per cent gain on a yearly and monthly basis. Calgary\u2019s composite MLS HPI also saw increases in November, rising at a near double-digit rate according to the RBC Economics report.<\/p>\n
Despite these recent increases and anticipated price growth in the near future, Hogue pointed out that housing price pressures would see some relief by the second act of 2022.<\/p>\n
\u201cWe expect extremely tight demand-supply conditions will keep prices under intense upward pressure in the near term though we see such pressure easing significantly by the second half of 2022 as markets achieve a better balance,\u201d said Hogue.<\/p>\n
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