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

With the challenges many Canadians are facing in the 2022 real estate climate, it is clear that innovation is needed. Fortunately, another real estate trend this year has been the rise of alternative homeownership models. These models include more than just rent-to-own agreements; and they are fundamentally changing the way real estate is owned.

For example, co-ownership is a new model in Canada that removes the two greatest pain points of homeownership: large down payments, and needing to qualify for and take on a mortgage.

With Key’s co-ownership model, you can become an Owner-Resident and co-own your property starting for just 2.5% of your home and no required mortgage.

Another benefit of co-owning with Key? You build home equity from day one. Our model also gives you the flexibility to build your home equity at your own pace.

Unlike renting, where your monthly rent will only ever increase, co-ownership allows you to reduce your monthly payments. As you invest more and build more equity over time, your monthly payments actually decrease. You can learn more about how monthly payments work here. Ultimately, the 2022 real estate market has been a challenging climate to navigate. New innovative models have been emerging to try and help make the dream of owning a home a reality again. If you’re an aspiring homeowner interested in exploring innovative models, you can read more about alternative homeownership models to consider and when co-owning real estate makes sense.

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