Posthaste: Get ready for the 'great adjustment' in Canada's housing market
Home prices should climb back to pandemic peaks by this time next year, says a new report that surveyed real estate brokers across the country.
Royal LePage predicts that the aggregate price of a home in Canada will rise 5.5 per cent year over year by the end of 2024 to $843,684.
“Based on this forecast, by the end of next year, home prices will have essentially climbed back to their pandemic peak, reached in the first quarter of 2022,” said the report.
But first there is the “great adjustment.”
For the past four years Canada’s housing market has been on a “roller coaster,” realtors say.
After sales tanked during pandemic lockdowns, buyers flooded back to the market enticed by cheap borrowing rates. The spike in demand pushed prices to unprecedented highs. At the peak of the boom in February 2022, the average price hit $816,720, according to figures from the Canadian Real Estate Association.
Enter the Bank of Canada. The most aggressive interest rate hiking cycle in recent memory sent the market into an extended correction, that, but for a brief rally this past spring, continues today.
Buyers, discouraged by higher borrowing costs, remain on the sidelines and inventories are building across the country. Though sales are down to 20 to 30 per cent in some regions, the decline in home prices is modest, said Royal LePage.
“Looking ahead, we see 2024 as an important tipping point for the national economy as the majority of Canadians acknowledge that the ultra-low interest rate era is dead and gone,” said Phil Soper, chief executive of Royal LePage.
“We believe that the ‘great adjustment’ to tolerable, mid-single-digit borrowing costs will have a firm grip on our collective consciousness after only modest rate cuts by the
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