REMAX: Canadian Home Prices to Remain Stagnant for Remainder of 2023
Canada’s housing market is undergoing a significant shift as it faces some of the highest interest rates in decades. This fall, RE/MAX Canada’s brokers and agents have observed a potential market cooling due to these soaring interest rates coupled with a concerning lack of housing inventory. Consequently, the national average sale price of homes is predicted to remain stable throughout the year, as per the 2023 Fall Housing Market Outlook Report.
President of RE/MAX Canada Christopher Alexander hints that if the trends observed this fall are any indicator, we might witness a bustling market in the early months of 2024. He suggests that buyers and sellers could capitalize on the decreasing prices at the beginning of next year.
Diving deeper into the data from the 2023 Fall Housing Market Outlook Report, there has been a marked decline in the number of listings between 1.2% to 40% from January to July in 2023 compared to the same period in 2022. Similarly, sales transactions also saw a decrease ranging from 4.1% to nearly 40% year-over-year.
Region-wise, the housing landscape offers mixed insights: in Western Canada and the Prairies— particularly regions like Calgary, Edmonton, and Winnipeg, expect residential sale prices to rise between 0.7% and 4.5% this fall, while areas such as the Greater Vancouver Area and Kelowna forecast a softening by up to 5%.
Likewise, Ontario also presents a varied picture. Regions like Hamilton, Ottawa, and Windsor anticipate a drop in average residential sale prices, whereas places like Burlington, Greater Toronto Area, and Sudbury foresee an uptick. Inventory shortages and the upward trend in interest rates have majorly influenced the Ontario market throughout 2023.
In Atlantic Canada, the combination of limited inventory and rising interest rates has negatively impacted markets, especially for budget-conscious or first-time homebuyers. While Halifax and Charlottetown expect a slight decline in average residential prices, Moncton envisions a 3% rise.
Meanwhile, a separate Leger survey conducted by RE/MAX Canada sheds light on the struggles faced by the younger generation in this housing climate. A whopping 55% of Gen Z and 49% of Millennial respondents admit to altering their housing aspirations due to the scarcity of affordable homes. The fluctuating interest rates, especially with the impending Bank of Canada announcement on September 6, have kept many prospective buyers and sellers on their toes.
The Leger survey reveals that 33% are adopting a “wait and see” approach, anticipating further interest rate developments. Yet, 51% of Canadians believe that any further hikes in the interest rate this year wouldn’t dent their financial plans or affect their home buying/selling decisions. Notably, the younger population, comprising 47% of Gen Z and 52% of Millennials, leans heavily on BoC’s interest rate announcements to time their market moves.
Information for this briefing was found via Remax. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
