Sluggish sales and rising interest rates have led experts to downgrade their year-end price forecast for Canada\u2019s housing markets.<\/p>\n
According to the latest Royal Lepage House Price Survey, the aggregate price of a home in Canada hit $802,900 in Q3 2023, an annual increase of 3.6%. On a quarterly basis though, the price dipped by 0.8%.<\/p>\n
Broken down by housing type, the national median price of a single-family detached home rose 3.4% year over year to $833,600, while the median price of a condominium increased 3.8% annually to $587,400. The prices fell 1.0% and 0.1%, respectively, from Q2.<\/p>\n
The third-quarter price declines follow a pair of summertime interest rate hikes, which brought the Bank of Canada\u2019s overnight rate to 5%. The BoC held steady in September, but economists are divided over whether there will be another hike on October 25.<\/p>\n
On a local level, the Greater Toronto Area and Greater Vancouver saw the largest quarterly price declines, with the aggregate price of a home in the former falling 2.8% to $1,147,400 and dipping 1.8% to $1,251,900 in the latter. Prices declined 1.7% in Regina, to $368,700.<\/p>\n
Meanwhile, prices in Calgary rose 1.6% from Q2 to Q3, and now sit at $653,700. The Greater Montreal Area saw a modest 0.6% increase to $575,400, as did Halifax, where prices jumped 0.7% to $498,900.<\/p>\n
Alongside falling prices, the majority of the markets included in Royal LePage\u2019s report experienced a slowdown in activity during the third quarter. As such, the real estate company has downgraded its national year-end price forecast.<\/p>\n
“With activity slowing, home prices softened in some of our major markets over the last three months, following a stronger-than-expected second quarter. Prices remain up on a year-over-year basis, with today\u2019s stable market standing in sharp contrast to the steep declines experienced in the third quarter of 2022,” said Phil Soper, President and CEO of Royal LePage.<\/p>\n
“While trading volumes in most regions remain sluggish, Canada\u2019s housing market is on solid footing, with pent-up demand building. We don\u2019t anticipate a material change in property prices through the remainder of the year.”<\/p>\n
Royal LePage now expects that the aggregate price of a home in Canada will increase 7% in Q4 compared to the same period a year ago. Previously, the forecast called for an 8.5% annual increase.<\/p>\n
Several cities have seen their price forecast revised downward, including Toronto, to 9%, and Edmonton, to 3%. Again bucking the national trend, Calgary\u2019s price forecast has been upgraded to 9.5%.<\/p>\n
Sluggish sales and rising interest rates have led experts to downgrade their year-end price forecast for Canada\u2019s housing markets.<\/p>\n
According to the latest Royal Lepage House Price Survey, the aggregate price of a home in Canada hit $802,900 in Q3 2023, an annual increase of 3.6%. On a quarterly basis though, the price dipped by 0.8%.<\/p>\n
Broken down by housing type, the national median price of a single-family detached home rose 3.4% year over year to $833,600, while the median price of a condominium increased 3.8% annually to $587,400. The prices fell 1.0% and 0.1%, respectively, from Q2.<\/p>\n
The third-quarter price declines follow a pair of summertime interest rate hikes, which brought the Bank of Canada\u2019s overnight rate to 5%. The BoC held steady in September, but economists are divided over whether there will be another hike on October 25.<\/p>\n
On a local level, the Greater Toronto Area and Greater Vancouver saw the largest quarterly price declines, with the aggregate price of a home in the former falling 2.8% to $1,147,400 and dipping 1.8% to $1,251,900 in the latter. Prices declined 1.7% in Regina, to $368,700.<\/p>\n
Meanwhile, prices in Calgary rose 1.6% from Q2 to Q3, and now sit at $653,700. The Greater Montreal Area saw a modest 0.6% increase to $575,400, as did Halifax, where prices jumped 0.7% to $498,900.<\/p>\n
Alongside falling prices, the majority of the markets included in Royal LePage\u2019s report experienced a slowdown in activity during the third quarter. As such, the real estate company has downgraded its national year-end price forecast.<\/p>\n
“With activity slowing, home prices softened in some of our major markets over the last three months, following a stronger-than-expected second quarter. Prices remain up on a year-over-year basis, with today\u2019s stable market standing in sharp contrast to the steep declines experienced in the third quarter of 2022,” said Phil Soper, President and CEO of Royal LePage.<\/p>\n
“While trading volumes in most regions remain sluggish, Canada\u2019s housing market is on solid footing, with pent-up demand building. We don\u2019t anticipate a material change in property prices through the remainder of the year.”<\/p>\n
Royal LePage now expects that the aggregate price of a home in Canada will increase 7% in Q4 compared to the same period a year ago. Previously, the forecast called for an 8.5% annual increase.<\/p>\n
Several cities have seen their price forecast revised downward, including Toronto, to 9%, and Edmonton, to 3%. Again bucking the national trend, Calgary\u2019s price forecast has been upgraded to 9.5%.<\/p>\n
Soper commended the federal government’s decision to remove GST on new rentals as a “step in the right direction” in the effort to improve housing affordability, but cautioned that Canada’s growing population and dwindling housing supply will continue to weigh on the issue.<\/p>\n
“Slower activity has allowed critically low inventory levels to build marginally in many regions, yet the quantity of homes available for sale in this country remains well below the level needed to keep a lid on property price increases,” Soper said.<\/p>\n
“We anticipate the growth of households to far outpace the current rate of new home construction. The housing challenge is complex. A large number of young Canadians are looking to purchase or rent their first home, the number of people per new household is smaller than a generation ago, and baby boomers are living to a greater age and choosing to stay in their homes longer. Retirements are growing and there aren\u2019t enough young people to take over, so we need to welcome immigrants at a record rate. New Canadians need housing too, of course.”<\/p>\n
“Once interest rates begin to ease, even by only a small amount, we expect buyers will return to the market in large numbers and the relentless upward march of home prices will begin again. At its root, housing supply remains out of step with the growing need for it.”<\/p>\n