The Canadian real estate market has experienced a slowdown in the past six months due to high-interest rates, causing both buyers and sellers to put their plans on hold. However, as Canadians adapt to increased borrowing costs and anticipate a potential rate cut by the Bank of Canada, experts predict a brisk spring market on the horizon.
According to the recently released Royal LePage House Price Survey, the aggregate home price in Canada increased by 4.3% year-over-year to $789,500 in the fourth quarter of 2023. Despite a slight quarter-over-quarter decrease of 1.7%, the survey forecasts a 5.5% increase in the aggregate home price for the fourth quarter of 2024.
Bank of Canada, having held its key lending rate steady at 5.0%, hints at the possibility of modest rate cuts later in the year. The challenge lies in balancing lower interest rates without stimulating spending and causing inflation to rise.
Royal LePage's 2024 Market Survey Forecast projects varying regional market performances. Notable highlights include gains in the greater regions of Toronto, Montreal, and Vancouver, while Calgary stands out with the highest year-over-year price appreciation at 10.7%. Despite quarterly declines in 81% of regional markets, Calgary is the only major region to post quarterly gains.
Looking ahead, the real estate market could experience a surge in activity with potential rate cuts, releasing pent-up demand. The report also notes that about 2.2 million mortgages in Canada are set to renew over the next two years, most at higher interest rates, adding another layer of complexity to the market dynamics.
For a more detailed overview, you can read Royal LePage's fourth-quarter releases for national and regional insights.
Source: Royal LePage Blog