Why Is the Condo Market Hot in 2022?

Why Is the Condo Market Hot in 2022?

As we enter into a new year, many investors wonder how the pandemic's effects will change the real estate market in 2022.

At the beginning of 2020, no one could have predicted how the market would overcome COVID-19 which made the housing market a hot topic of conversation amongst buyers. But, in May 2020, the market began to rebound, and with the high demand, the housing market saw a record-breaking year in 2021. In fact, in 2021, the housing market saw record-breaking price increases. So, with all of this information, what can we expect this year?

To think about where the housing market and more specifically, the pre-construction condo market is going, we need to look back at where we’ve been and where we are today. Recently, deputy chief economist for CIBC, Benjamin Tal, made his predictions for this year.

Some of the key takeaways from his analysis include:

Supply and Demand

What we saw in the Summer of 2020 was an increase in demand and very little supply. For pre-construction condos, we had little inventory and a minimal supply of products on the market. This supply issue is primarily due to the demand because developers simply can't keep up with the number of people coming into the province.

Many people want to live in one of the 25 urban growth centres, which means that many developers are building up, not out. In addition, the government is expecting a surge in population growth over the next few years, with most of that growth coming from immigration. With all of this demand, developers are more focused on building condominiums to house more residents than low-rise homes.

The demand for pre-construction condominiums also contributes to the supply issue because it can take developers approximately a decade before they can even start construction. From the time developers acquire land, get their proposal approved by the municipality, and break ground, this process alone can take ten years. Additionally, with such a high request for construction, it can take four or five years for the condominium to be completed. Therefore, with population growth, high demand and low supply, we can expect the prices for real estate to start inflating this year.

Rental Rates

It is important to remember that the immigration rate resembles pre-COVID numbers, with Tal estimating that approximately 410,000 immigrants will be coming into the country yearly. Once newcomers settle in, Tal expects them to rent a home for 3 to 4 years before entering the real estate market, which means that rental rates can be expected to return to 2019 levels. Additionally, we can expect to see an increase in the number of returning citizens coming back to the country this year.

So, aside from the surge in immigration, the demand for rent will also come from citizens returning to Canada. With such a demand in the rental market, the GTA housing market will start changing. Based on the Toronto Regional Real Estate Board (TRREB) Q3-2021 Rental Market Report, approximately 30% of the population across the GTA are renters. However, due to the growing rental demand and the inflation of housing prices expected this year, we may start to see a shift from the number of renters versus the number of homeowners. Soon, these numbers may resemble those of New York, where 35% of people are homeowners, and 65% are renters. This shift in the rental market gives investors all the more reason to buy now to take advantage of the real estate market rather than wait.

Rental Rates of Condo Unit in 2022


Although the prices in the housing market reached a record high last year, sales dropped in Q2-2021. The Canadian Real Estate Association (CREA) recently reported that home sales in July 2021 fell 15% compared with the same month the previous year. This means that the real estate market is slowing down based on the number of sales, and according to Tal, this is a good sign. Tal states, “One of the reasons why activity was so strong until very recently was because of the fact that we were borrowing activity from the future. There is this sense of urgency to get into the market because of low interest-rates. You don't want to miss it.” He goes on to say that parents are encouraging their kids to get into the real estate market by helping them financially.

In fact, Tal states that gifting is up by 20 - 30 per cent, which means that parents are gifting their children the amount or partial amount for their down payment to get their kids into the market. It’s clear that many people were trying to get into the market when the prices and interest rates were more affordable. Now, we have reached a price resistance, especially in low-rise housing. Many people simply cannot afford low-rise homes despite low-interest rates, which means many will buy pre-construction condos. Tal believes that the condo market will outperform low-rise over the next 6 to 12 months, especially in the city as we come out of lockdown and more people go back to work.

Based on what we have discussed with the supply issue, real estate prices will start to inflate, which means it will soon be harder and harder for the younger generation to buy homes. As we see this shift from prices increasing from low supply and many people renting due to affordability issues, it is important for investors to get into the pre-construction condo market now. Only then will you set yourself up for success and potentially avoid inflation.


Based on Benjamin Tal’s forecast for the real estate market in 2022, it’s clear that investors should buy now due to the supply issue, and the demand in the rental market, we know that prices will only continue to inflate, leaving investors with less of an opportunity to get into the pre-construction condo market as the year progresses.

If investors buy now, they will not only see the value of their condominium unit gradually increase, but they can rent out their unit to tenants while they watch their investment grow. Unfortunately, it will only get harder to enter the market as time goes by.

As platinum agents, we specialize in the pre-construction condo market and can answer any questions you may have about these predictions. To learn more about the future of the condo market, register with us today!

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Alyssa writes for GTA-Homes and focuses on the pre-construction and real estate industry. Alyssa attended York University as a Communications Major, while completing her degree she worked in marketing gaining first-hand experience in her field. It was here that she learned how to write for many outlets including public relations, social media, emails and blogs. Alyssa is pleased to join the GTA-Homes team and to write for RealInsights. Her goals is to provide clients with articles that will inform and intrigue them about the industry and market trends.