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  • Writer's pictureJose Gustavo Salcedo

Is the Canadian Housing Market Headed for a Shift in 2024?

Updated: Dec 21, 2023


Canadian homeowners and real estate investors, get ready for a shift in the housing market landscape by the end of 2024. In its latest Market Survey Forecast, leading real estate brokerage Royal LePage predicts a return to normalcy, marking a crucial tipping point for the Canadian housing market.


Key Points:


1. Continued Growth in Home Prices:

  • Royal LePage projects a 5.5% year-over-year increase, bringing the aggregate home price to $843,684 in the fourth quarter of 2024.

  • Median prices for single-family detached properties and condominiums are expected to rise by 6% and 5% to $879,164 and $616,140, respectively.

2. Tipping Point in 2024:

  • Phil Soper, President and CEO of Royal LePage, emphasizes that 2024 is a pivotal year for the national economy.

  • The era of ultra-low interest rates is perceived to be over, leading to what Soper terms as the "great adjustment" to mid-single-digit borrowing costs.

3. Market Performance Across Cities:

  • Calgary stands out as a market defying the trend, experiencing price increases while other urban centers have seen declines.

4. Interest Rate Stability:

  • The report assumes the Bank of Canada will maintain interest rates at 5% throughout the first half of 2024.

  • Despite being higher than in recent years, this stability is expected to provide confidence and a sense of predictability for potential homebuyers.

5. Changing Perspective on Mortgage Rates:

  • Canadians are urged to embrace the reality of mortgage rates in the 4-5% range as the new normal.

  • This shift in mindset is anticipated to unleash pent-up demand, especially among first-time buyers who have been waiting for more favourable conditions.

6. Market Dynamics:

  • Anticipated confidence among first-time buyers, bolstered by savings amassed during the housing market downturn, is expected to drive increased demand.

  • Families, who postponed upgrading their homes, are predicted to enter the market in greater numbers as a result.

7. Quarterly Forecast:

  • The forecast anticipates modest quarterly gains in home prices during the first half of 2024.

  • More significant increases are projected in the second half of the year, coinciding with the expected commencement of interest rate cuts by the Bank of Canada.

As the real estate landscape evolves, Canadians are advised to stay attuned to these developments. The forecasted changes suggest a transition to a more balanced and stable housing market, offering opportunities for both buyers and sellers alike. Keep a close eye on the market dynamics as we approach this critical tipping point in 2024.

 

Source From: Wealth Professional

Adapted by Jose Gustavo

 



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