While there’s no crystal ball that lets us see into the future, we’ve got the next best thing: years of expertise and a critical eye!
2022 is shaping up to be yet another sizzling year for the Montreal housing market; here are some of our key real estate predictions, as shared by our founder LJ.
Prediction 1: Prices will keep rising
Just like 2021, we’ll still be in a seller’s market this year: 2022 is shaping up to be very, very hot, mostly due to high demand and a continuous lack of inventory. Prices have increased more than the historic 3% average that used to be commonplace, and we don’t see that cooling off anytime soon.
Prediction 2: Interest rates will go up
Based on conversations with mortgage brokers, we expect interest rates to continue to rise. At the end of 2021, the five-year fixed rate was floating around 2.75%, and the variable rate was about 1% off of prime. So, we’re sitting at about 1.45% effective.
The government worked hard to bring these numbers down at the beginning of the pandemic in order to stave off an economic slowdown, but now, we’re starting to come out the other side.
Way back at the beginning of 2019, the five-year fixed rate was sitting closer to 3.8%, and we’re expecting it to get at least halfway back to that point. Currently, we’re sitting around 2.75%, which is just the beginning: we predict it will hit 3.5%, and maybe even 3.8%, because banks are looking to stabilize the market a little bit more. We’ve seen heavy appreciation, and now it’s time to cool the market down.
Prediction 3: Cottage prices will cool off
As the world slowly settles back into a normal routine (and by normal, we mean pre-pandemic), we think the “cottage country” frenzy will begin slowing down. We’re already seeing a bit of a cooldown compared to what the market looked like throughout 2020 and in the first half of 2021.
Moving forward, we predict cottage prices will continue to balance out, especially as more and more people re-center their lives around Montreal. Offices are opening up, and people certainly won’t want to commute into town from the country: they’ll want to be closer to their day-to-day responsibilities.
We don’t expect price drops to be substantial or overly dramatic, but you should start seeing way fewer multiple-offer bids.
Prediction 4: Digital tools will improve
Many companies are already making big moves towards incorporating 3D tours, floor plans, and staged photos into their approach. In 2022, we foresee many more players hopping on the digital bandwagon in order to level the playing field and ramp up the user experience.
Brokers who historically haven’t put too much stock into marketing are going to start having a tough time. Over the last 2 years, the market was so hot that properties were almost selling themselves – however, coming off of that high, brokers who can’t catch up on the marketing front may start losing a chunk of their market share.
In fact, we’ve already started noticing the days-on-market going up across the board. This may be the moment we’re reminded that real estate sales don’t typically happen over a one-week period!
Want to chat more about what’s to come in 2022?