The Canadian real estate market is approaching a significant turning point, according to the latest Q1 forecast by Royal LePage. This analysis provides an insight into expected national pricing trends by the end of 2024, highlighting how various cities, including Toronto and Montreal, may experience varying levels of price appreciation.
National Real Estate Trends
Royal LePage’s forecast indicates a general upward trajectory in home prices across Canada. By the fourth quarter of 2024, the national aggregate home price is expected to rise by 9% year over year, a noticeable increase from the previously forecasted 5.5%. This reflects a robust recovery and a potential return to seller’s market conditions, which have been absent since the interest rate hikes began in early 2022.
Focus on Major Cities
Toronto and Montreal are expected to see significant price increases of 10% and 8.5% respectively. This prediction places Toronto on a path to potentially outstrip Vancouver as the most expensive real estate market in Canada — a shift that would be monumental, given Vancouver’s long-standing status at the top.
In contrast, Calgary has demonstrated resilience and growth, bucking national trends with a predicted year-over-year aggregate price appreciation of 9.7% for the second consecutive quarter. This is notable as Calgary continues to thrive despite the broader market slowdowns experienced in other regions.
The Role of Economic Factors
The report suggests that broader economic factors, including interest rate cuts and the ongoing cycle of mortgage renewals, will play critical roles in shaping the real estate market. Nearly all mortgages taken out before the rate hikes in March 2022 are expected to have cycled through renewals by the end of 2026, adapting to the new, higher interest rate environment.
This transition period is also supported by further income growth and a phase of relatively flat home prices, which have helped mitigate the impact of rising mortgage costs. Despite higher borrowing costs, the market has shown resilience, with homeowners prioritizing mortgage payments over discretionary spending.
Government Initiatives and Market Response
The federal government’s response to housing affordability challenges includes a push for rapid construction of new homes. With a goal to build 3.9 million homes by 2030, this initiative is expected to significantly influence market dynamics, accommodating the needs of the 470,000 new permanent residents welcomed in 2023 alone.
Future Projections
Looking ahead, the predictions for Q4 2024 suggest a continued rise in national average prices, from approximately $810,000 to $875,000. Toronto and Montreal, in particular, are set to experience substantial growth, potentially altering the landscape of Canadian urban real estate.
As these predictions unfold, the real estate sector may face a dynamic period of adjustment and growth, reflecting broader trends in the Canadian economy and urban development. It will be an interesting journey through 2024.
National Real Estate Trends
Royal LePage’s forecast indicates a general upward trajectory in home prices across Canada. By the fourth quarter of 2024, the national aggregate home price is expected to rise by 9% year over year, a noticeable increase from the previously forecasted 5.5%. This reflects a robust recovery and a potential return to seller’s market conditions, which have been absent since the interest rate hikes began in early 2022.
Focus on Major Cities
Toronto and Montreal are expected to see significant price increases of 10% and 8.5% respectively. This prediction places Toronto on a path to potentially outstrip Vancouver as the most expensive real estate market in Canada — a shift that would be monumental, given Vancouver’s long-standing status at the top.
In contrast, Calgary has demonstrated resilience and growth, bucking national trends with a predicted year-over-year aggregate price appreciation of 9.7% for the second consecutive quarter. This is notable as Calgary continues to thrive despite the broader market slowdowns experienced in other regions.
The Role of Economic Factors
The report suggests that broader economic factors, including interest rate cuts and the ongoing cycle of mortgage renewals, will play critical roles in shaping the real estate market. Nearly all mortgages taken out before the rate hikes in March 2022 are expected to have cycled through renewals by the end of 2026, adapting to the new, higher interest rate environment.
This transition period is also supported by further income growth and a phase of relatively flat home prices, which have helped mitigate the impact of rising mortgage costs. Despite higher borrowing costs, the market has shown resilience, with homeowners prioritizing mortgage payments over discretionary spending.
Government Initiatives and Market Response
The federal government’s response to housing affordability challenges includes a push for rapid construction of new homes. With a goal to build 3.9 million homes by 2030, this initiative is expected to significantly influence market dynamics, accommodating the needs of the 470,000 new permanent residents welcomed in 2023 alone.
Future Projections
Looking ahead, the predictions for Q4 2024 suggest a continued rise in national average prices, from approximately $810,000 to $875,000. Toronto and Montreal, in particular, are set to experience substantial growth, potentially altering the landscape of Canadian urban real estate.
As these predictions unfold, the real estate sector may face a dynamic period of adjustment and growth, reflecting broader trends in the Canadian economy and urban development. It will be an interesting journey through 2024.
