2022 has been the marker of significant change in the real estate industry. The market notorious for explosive growth has evolved, and new trends in the industry are changing how we think about real estate. Here are some of the most notable real estate trends in 2022.

1. Rising Interest Rates

As interest rates have increased to combat growing inflation in Canada, the housing market has started to shift. Fueled by interest rate increases of over 2% in 2022 alone, amongst other factors, home sales have decreased 24% year over year according to TD home sales data.

In a real estate market that was already unattainable for many, recent interest rate hikes have made mortgages even less attractive and accessible for Canadians. This challenge is especially difficult for first time home buyers, who often have to start saving from scratch and are stuck putting their money towards rent. Plus, homeowners on variable rate mortgages are increasingly unable to afford their mortgage payments.

The bottom line: Sadly, homeownership has only become more difficult for first-time Canadian homebuyers in 2022.

2. Rent Increases

With homeownership continuing to be an impossible goal in 2022 for many aspiring homebuyers, the rental market has grown sharply. According to a report from Rentals.ca, 1 bedroom rent has increased by 9.1% y/y, and 11.6% y/y for 2 bedroom rentals.

The rental climate has become fiercely competitive as a result, with bidding wars for rental properties becoming the new normal. It seems like no matter where Canadians turn in the real estate market, they are met with significant challenges.

3. Alternative Homeownership models

To address these challenges, alternative homeownership solutions have gained momentum. Key’s innovative model offers aspiring homeowners a structured and attainable pathway to homeownership. Key’s program enables participants to start their journey with as little as 2.5% down. Over a structured five-year term, participants benefit from increases in home value while working toward full ownership at a predetermined price. Key's program is creating stability and peace of mind in an otherwise uncertain real estate market. Innovative solutions like this are becoming essential as Canadians seek alternatives to renting or traditional homebuying. Learn more about how Key’s program works here.

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