Home price growth across Canada is expected to remain sluggish in 2024, while the country’s largest housing market—Toronto—is expected to see prices fall, according to a new forecast released today by Re/Max.
According to the company’s 2024 housing market outlook, average prices will grow only 0.5% next year. But regionally, there are expected to be pockets of strength, as Re/Max said 61% of the regions it surveyed should see price growth of between 2% and 7.5%.
While house prices in Canada remain roughly 38% higher across the country now than they were pre-pandemic, a slowdown throughout the fall of 2023 is expected to sour sellers’ moods heading into the New Year.
“It’s been a challenging year for Canadian homebuyers and sellers, who have been feeling the effects of a severe housing shortage and the high cost of living, but much like Canada’s housing market, Canadians have stayed resilient,” Christopher Alexander, president of Re/Max Canada, said in a statement.
A regional breakdown
Price growth in Metro Vancouver, the most expensive real estate market in the country, is expected to rise 2% to an average of $1.52 million.
Meanwhile Halifax, which saw bloated real estate prices thanks to inter-provincial migration during the pandemic, is expected to see no growth at all in 2024. Mississauga and Brampton, with average prices sitting just over $1 million, are also expected to see flat price growth next year, although both cities saw declines of 5.5% and 11%, respectively, in 2022.
Overall, however, 61% of all markets Re/Max included in its reports will continue to see prices rise.
There are, however, some noticeable price declines expected across the country. The Greater Toronto Area is expected to see prices drop 3% in 2024 to $1.09 million, according to Re/Max.
Average prices in Victoria, B.C., are likely to slip 2% to $942,000. And Kitchener-Waterloo, a region that logged an 8.4% price drop between 2022 and 2023, may see another 8% drop next year.
Perhaps the most striking change in fortunes will be in North Bay, ON, a market that saw a whopping 25% jump in prices last year. In 2024? No growth at all, by Re/Max’s estimation.
Affordability challenges expected to continue in the new year
In nearly every region of Canada, homebuyers are struggling with a high cost of housing— worsened throughout the pandemic—and interest rate hikes. And 2024 is expected to be no different, even as overall sales rates drop.
Overall housing unit sales are down 45% from early 2021 levels, according to a November report from CIBC economists Benjamin Tal and Katherine Judge. That slump is happening nationwide, the two economists write, and will likely get worse before it gets better.
“The fact that we are at or approaching a buyers’ market does not mean that there will be a significant increase in demand,” they note, “as low affordability will keep potential buyers on the sidelines.”
However, not all would-be homebuyers are sitting out on the sidelines.
Brokers and agents consulted for the Re/Max report also note that some would-be homeowners are turning to one tactic in particular in order to help overcome affordability hurdles: becoming landlords.
“Based on their insights,” the report reads, “the majority of regions surveyed noted many homebuyers are looking for primary residential properties with rental potential to get the most of their investment and offset the rising cost of living and reduce mortgage payments.” Re/Max expects this trend to continue into 2024.
Meanwhile, prospective homeowners haven’t lost sight of how valuable real estate can be, even if price growth remains weak for the coming year.
A full 73% of Canadians still consider real estate to be the best investment they could make, according to a Leger survey commissioned by Re/Max.
That sentiment was reinforced by a recent consumer survey by Mortgage Professionals Canada, which found nearly 80% of respondents continue to see real estate as a good long-term investment, despite the current market conditions.
“While the market is anticipated to cool in the first half of 2024,” the Re/Max report reads, “Canadians’ perceptions of real estate as a good investment haven’t shifted since 2022.”