The Canadian housing market is experiencing a renewed sense of optimism as interest rates begin to ease. While challenges remain, early indicators suggest that the market is headed toward healthier territory.
In its latest housing market outlook report, RE/MAX said that average home prices across the country are expected to rise between 1% and 6% by the end of the year, signalling a gradual return to more stable conditions.
"The fall market is usually a good early indicator for activity as we look ahead to early 2025, and we're headed toward more healthy territory," RE/MAX Canada president Christopher Alexander said in the report. "With interest rates starting to ease, buyers are beginning to come off the sidelines.”
However, Alexander noted that while there are signs of recovery, the market won’t immediately return to pre-pandemic activity levels.
"That's not to say the fall market will be in full swing according to historic standards,” he said. “Consumers will drive that trend, so we'll need to see a bigger move by the Bank of Canada for that to happen."
Buyers gain confidence
The recent shift in interest rates has sparked optimism among first-time homebuyers.
A Leger survey conducted as part of the RE/MAX report found that one-quarter of Canadians (25%) are actively saving for a home, with the highest confidence seen among Millennials and Gen Z buyers aged 18 to 24. The easing rates are making homeownership more accessible for this group.
However, not all current homeowners are benefiting from the rate reductions. Fourteen percent (14%) of survey respondents said they face mortgage renewals in the coming months and are concerned they may need to sell their homes due to the impact of higher interest rates.
Though borrowing is becoming cheaper, RE/MAX pointed out that housing affordability remains a significant issue.
Many Canadians are prioritizing daily living expenses, such as utilities and food, over home purchases. A substantial number of people—28%—are even considering leaving the country due to housing costs, while 25% are reconsidering whether to start a family.
"Despite some consumer confidence starting to return to the market this season, the reality is Canadians are still grappling with some serious housing affordability challenges rooted in lack of supply,” Alexander said.
Borrowing may be getting slightly cheaper, but this won't make housing affordable in the long run.
“Markets ebb and flow, and as buyers re-enter the market and absorb inventory, we'll see more upward pressure on price,” Alexander added.
"Ultimately, for the long-term health of Canada's housing market, we need a national housing strategy developed in collaboration between all levels of government, that's more strategic and visionary in how we can use existing lands and real estate to boost supply.”
Regional market trends
RE/MAX brokers across the country are forecasting steady increases in sale prices for most regions.
In cities like Vancouver, Calgary, Halifax, and Winnipeg, average home prices are expected to rise between one and six percent by the end of 2024. However, certain markets, such as Toronto, Hamilton, and Burlington, are projected to see moderate price declines of 2% to 3%.
The number of listings has also seen an uptick in most regions. According to the report, 82% of markets recorded an increase in listings between 2.3% and 34.7% from January to July 2024.
Sales transactions followed a similar trend, with growth seen in Atlantic Canada, Western Canada, and most parts of Ontario, although some larger Ontario markets like Toronto and Brampton experienced a decline in sales activity.
As the fall housing market progresses, RE/MAX anticipates continued competition in about a third of markets, which are expected to remain seller’s markets. However, this dynamic could shift as interest rates continue to decrease and buyer activity rises.
CMP
We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.
Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!
No comments:
Post a Comment