Annual home prices predicted to rise nearly 10% by end of year: Royal LePage
Canadian homes will be nearly 10 per cent more expensive at the end of 2024 than they were the year before, according to a new report.
On Friday realty firm Royal LePage released an updated forecast predicting that aggregate Canadian home prices will rise nine per cent in the fourth quarter of this year compared with the end of 2023.
The report says two things are pushing prices up: the “severe shortage” of housing across the country and more demand from sidelined homebuyers who could enter the market if the Bank of Canada lowers its key interest rate, which currently sits at five per cent.
“A decrease in the bank rate, which will translate into cheaper mortgages, will increase the demand in the marketplace” and push up prices, Royal LePage CEO Philip Soper told Global News.
Pointing to previous Royal LePage reports, Soper said many Canadians who have been waiting to buy a home will take an even marginally lower interest rate as a sign that it’s time to buy.
“When we reach out to Canadians,” he said, speaking from Toronto, “they say, ‘I just want to see some indication that rates are beginning to drop (so) that I’ll feel comfortable getting into the market.’”
John Pasalis, president of Toronto brokerage Realosophy Realty, also cautioned that lower interest rates may not help homebuyers.
“If rates drop enough, it’s going to stimulate more demand, it’s going to push prices higher,” he said.
“People expect that (lower rates) could potentially give them a bit more of an edge, but it gives every other buyer an edge as well.”
Soper said Royal LePage revised its price prediction upwards after a strong first quarter in 2024.
Nationwide, the report shows the median (the middle number between the lowest and highest prices) for a
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