Posthaste: Canadian home prices will experience 'sizable pullbacks' in cities you might not expect
Home prices in Canada aren’t done falling this year as a lack of affordability and looming mortgage renewals weigh on markets across the country, according to an analysis from economists at Oxford Economics.
Oxford is calling for home prices to fall a further five per cent by the fourth quarter of 2024, with the drop from Canada’s home-sales peak in the first quarter of 2022 reaching 18 per cent, Tony Stillo and Michael Davenport, economists at Oxford and the authors of the report, said.
“We think elevated housing unaffordability and the growing strain on households from the wave of mortgage renewals will cause listings to grow faster than demand in H2 (second half) this year,” Stillo, chief Canada economist at Toronto-based Oxford Economics Canada, said in a press release.
Stillo and Davenport predict home prices in Canada’s major metropolitan areas will take hard hits.
“We anticipate widespread house price declines in all Canadian metros we forecast in H2 2024,” they said in the report.
For example, they are calling for prices in Toronto and Vancouver to fall seven and 10 per cent, respectively, by the end of the year — more than the national average — due to a lack of affordability. But other parts of the country will also experience drops in home prices.
The report calls for “sizable price pullbacks” in markets including Halifax, Calgary, Quebec City and Winnipeg.
Oxford is calling for home prices in Calgary to fall 5.1 per cent in the third quarter. Alberta’s oil capital was a house-buying juggernaut with prices rising 11.6 per cent from the early 2022 peak through to June 2024.
Prices in these cities are expected to feel the effects of the coming wave of mortgage renewals as some people are forced to list their
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