Canadian real estate has been a wild ride over the last couple of years. Here’s a look at 2024 predictions:

Canada Home Prices Expected to Rise in 2024 – But by How Much?

It has been a mixed year for the Canadian real estate market. The industry faced a tidal wave of challenges: rising interest rates, an economy that has slipped into a technical recession, depleted pandemic-era savings, and uncertainty in the housing sector.

Industry observers anticipated that Canada’s housing market would come to a screeching halt during the Bank of Canada’s (BoC) monetary policy tightening crusade. While there was a correction throughout the real estate landscape and prices have yet to return to pre-pandemic levels, sales activity has been resilient.

For example, in September, the housing data was pretty compelling. According to the Canadian Real Estate Association (CREA), national home sales declined 1.9 per cent month-over-month, but they were 1.9 per cent higher than the same time a year ago. The MLS® composite benchmark Home Price Index (HPI) dipped 0.3 per cent monthly but climbed 1.1 per cent year-over-year. Additionally, the national average sales price surged 2.5 per cent on an annualized basis.

“This presents an opportunity for buyers, although many of them seem content to stick to the sidelines until there’s more evidence that interest rates are indeed finally at the top,” said Larry Cerqua, the Chair of the national real estate association, in a statement. “This, combined with sellers who, by and large, do not need to sell, means the market will likely remain on the slower side until next year. That said, there are still tens of thousands of deals going on every month, and if you’re looking for information and guidance about how to buy or sell a property in the current market, contact a REALTOR® in your area.”

Does this mean that the worst is over? Looking ahead to the fresh calendar year, and market analysts believe that 2024 will be an improvement over 2023.

Canada Home Prices Expected to Rise in 2024

According to an updated CREA forecast, the national average home price is projected to increase 1.5 per cent next year, totalling $690,916. If accurate, it would mark the fourth consecutive year that the annual national average price remained in the $680,000 to $700,000 range.

CREA analysts are also expecting national home sales to rebound by nine per cent next year, with more than 490,000 units being sold, citing interest rates potentially trending downward “and housing markets make a return back towards their long-term trends.”

While monetary policymakers have signalled a higher-for-longer environment to vanquish inflation from the Canadian economy, the futures market is pencilling in a rate as early as June 2024.

How does this compare to other forecasts?

TD Economics published its provincial housing market outlook for 2024 and 2025. Economists think prices and sales will tumble in the first quarter of 2024 and then rebound by the second quarter.

“As Canada’s growth engine continues to downshift and investors move to price in the growing likelihood of rate cuts, Canadian bond yields should start to edge down from their current multi-year peak by the end of this year,” wrote Rishi Sondhi, a TD economist, in a research note. “Population growth should also remain robust while job markets bend (but not break) under the weight of higher rates. These forces should support gains in home sales and prices, starting in 2024Q2.”

Ultimately, home sales are expected to surge 5.2 per cent, and home prices are predicted to rise 0.5 per cent.

Here is a breakdown of what the bank is anticipating next year:

Newfoundland and Labrador

  • Home Sales: +4.2 per cent
  • Home Prices: +3.7 per cent

Prince Edward Island

  • Home Sales: +5 per cent
  • Home Prices: +1.5 per cent

Nova Scotia

  • Home Sales: +4.1 per cent
  • Home Prices: +2.7 per cent

New Brunswick

  • Home Sales: +4.9 per cent
  • Home Prices: +3.9 per cent

Quebec

  • Home Sales: +5 per cent
  • Home Prices: +2.5 per cent

Ontario

  • Home Sales: +3 per cent
  • Home Prices: -0.5 per cent

Manitoba

  • Home Sales: +6.6 per cent
  • Home Prices: +4.5 per cent

Saskatchewan

  • Home Sales: +4.2 per cent
  • Home Prices: +3 per cent

Alberta

  • Home Sales: +8.3 per cent
  • Home Prices: +4.4 per cent

British Columbia

  • Home Sales: +6.8 per cent
  • Home Prices: +1.2 per cent

Is There a Chance of Showers?

But while the consensus appears that the Canadian real estate market should be on an upward trajectory in 2024, one report suggests home prices could slide double digits next year.

According to a September 2023 forecast by Mortgage Professionals Canada (MPC) and Oxford Economics, home prices could tumble ten per cent by early next year as the country slides into a recession and the Bank of Canada holds rates at five per cent until the middle of 2024.

“Over the rest of the decade, we forecast housing starts to exceed historical levels in the Atlantic Provinces, Prairies, and Ontario, while the other Canadian regions will continue to experience a downturn in growth,” the report stated.

Indeed, many factors could influence the nation’s housing market in 2024: strengthening demand, lacklustre supplies, higher borrowing costs, anemic economic growth, and growing population trends.

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