Housing market observers shouldn’t expect a rapid bounce-back in activity this spring, according to Royal Bank of Canada (RBC) assistant chief economist Robert Hogue.
Rather than an immediate rebound, Hogue anticipates a "staggered" return of buyers throughout the second half of the year, the Financial Post reported.
While some expect a bustling spring fuelled by potential interest rate cuts, Hogue believes it will take significant reductions to entice many buyers back into the market.
“We’re likely to see a bit more activity going forward, but more of a gradual ramp-up as opposed to a sharp snap-back this spring,” he explained.
Hogue predicts an uptick in sellers who previously paused due to lower prices. This influx of listings could further shape the market's trajectory.
“A key dynamic we’ve been watching this year has been the reluctance of some homeowners to list their homes given that mortgage rates are the highest they’ve been in over 10 years,” Andrew Lis, GVR’s director of economics and data analytics, told the Financial Post.
After months of decline, Canadian home prices appear to be finding their footing. February data showed no change in the benchmark price.
Hogue said this could mark a cyclical low point, but he doesn't see prices skyrocketing from here. Instead, he expects a gradual increase alongside market activity.
“The correction phase may be over, and the next phase of it will depend on the perceptions and confidence or anticipation that things could get hotter,” he said.
A wave of distressed sellers driven by mortgage renewals is also unlikely as “most sellers are in a good position to get the price that they want. They’re not forced into selling,” said Hogue.
CMP
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