Canadians are increasingly using the equity in their homes for loans as higher real estate prices
encourage spending.
The seasonally adjusted balance of home equity lines of credit rose 1% to $162 billion in
February of this year, according to credit data released by Statistics Canada. That’s the fastest
monthly increase since 2012, and the fifth consecutive month of growth.
While interest rate hikes by the Bank of Canada this year may start to cool a real estate boom
that has seen home values surge 50% or more in the past two years, prices and sales remain at
elevated levels.
Separately, realtor Royal LePage raised its forecast for home prices this year despite signs of a
slowdown in major housing markets across the country.
The real estate brokerage said it now expects the aggregate price of a home in Canada to rise
15% year-over-year in 2022 to $895,900, led by the country’s two hottest markets – Toronto and
Vancouver. In December, Royal LePage forecast a national gain of 10.5% this year.
Canadian home prices jumped 25% in the first quarter of this year, according to the firm’s
House Price Survey, the largest gain on record.
Royal LePage is forecasting Greater Toronto Area (GTA) home prices will rise 16.5% this year
and the Vancouver market will see a 15% gain, to $1.3 million and $1.4 million respectively.
