As we enter 2022’s final quarter, we at AVESDO are digging into the data our system – which handles thousands of national transactions annually – has processed this year.
Inflation was quickly climbing by Q4 of 2021 and would surge in Q1 of 2022, closing the quarter at 6.7% – a full 2% higher than the fall market. The Bank of Canada would not raise interest rates from their historically-low 0.25% overnight rate until March, and then would only inch it up. Our system recorded double-digit price escalation from Q4 to Q1, and a full 20% increase YoY.
Price elasticity varies by region, but YoY prices are neutral in most markets with the gains from Q3 2021-Q1 2022 all but erased. Notably, prices are relatively flat across regions – the difference between cities within a 45-minute drive from downtown Vancouver or Toronto has compressed, with the average sale price through our system being over $1000psf now .
Buyer data shows Baby Boomers continue downsizing, millennials continue buying their first homes and upsizing, and surprisingly, investors continue putting money into assets, backed by the strength of rising rents. When offered at “good” market value, the data shows present demand and brisk absorptions – clearly different from when there is no demand.