Canadian Market Survey Forecast suggests a return to a more stable Canadian housing market by the end of 2024, offering homeowners and real estate investors a positive outlook. The forecast anticipates ongoing growth in home prices, with the aggregate projected to reach $843,684 in the fourth quarter of 2024, reflecting a robust 5.5% year-over-year increase. Further, the median prices for single-family detached properties and condominiums are expected to experience growth of 6% and 5%, reaching $879,164 and $616,140, respectively.
The forecast encompasses all major markets, with Calgary emerging as a standout performer, defying the trend seen in other urban centers where prices have experienced declines. This positive trajectory is attributed to the assumption that the Bank of Canada will maintain a 5% interest rate throughout the first half of 2024, providing prospective homebuyers with a sense of stability despite being higher than rates seen in recent years.
The Financial Economy of Canada, describes 2024 as a pivotal year for the national economy. He notes that Canadians are recognizing the end of the ultra-low interest rate era, marking a “great adjustment” to tolerable mid-single-digit borrowing costs. The report suggests that this realization will have a significant impact on the collective consciousness, with the expectation that Canadians will accept mortgage rates in the 4-5% range as the new normal.
Soper emphasizes the psychological shift that is likely to occur, where many Canadians, fueled by savings accumulated during the market downturn, will regain confidence in entering or re-entering the housing market. With the return of first-time buyer demand, the report predicts increased property listings as families, who delayed upgrading their homes, feel more confident in listing their properties.
While the forecast indicates modest quarterly gains in home prices during the first two quarters of 2024, more substantial increases are expected in the second half of the year, following anticipated interest rate cuts by the Bank of Canada. This points to a more dynamic and promising housing market as the year progresses.
