Canadian Real Estate Association Sees Housing Rebound in 2024

The Canadian Real Estate Association is projecting that housing prices and sales will rebound in 2024 after ending 2023 with a 4.8% decline in prices.

CREA says housing prices will rise next year by 4.7% and sales will rise by 13.9% to 561K units. The association projects that the average price of home will be $503K this year and $526K in 2024.

The group says home sales will dip 1.1% this year, with little change in month-over-month sales.

“As the spring market heats up and it looks as though some buyers are coming off the sidelines, it’s important to remember that the intense market conditions of recent years have not gone anywhere, they’ve just been on pause,” said Jill Oudil, CREA’s chair, in a press release.

Canadian home buyers who are starting to dip their toes back in the market were sent to the sidelines by the Bank of Canada’s campaign of eight consecutive rate increases last year.

On a seasonally-adjusted basis, sales reached 33,833 in March, about 1% higher than they had been in February, the second consecutive month of higher sales.

As month-over-month sales rose, new listings remain at 20-year lows, CREA reported. On a seasonally-adjusted basis, new listings totaled 53,298 in March, down 5.8% from February. Actual new listings hit 68,597, a 27.4% drop from a year ago.

With supply at historic lows, Oudil said homes are selling faster, but it has not been enough to entice some sellers to list their properties.

While the CPI remains above 5% in the US and Canada, the Bank of Canada reiterated this week that it has no intention of tampering with Canada’s relatively strong economy—which is expected to lead the G7 in GDP this year—by initiating new rate hikes.

Canada’s central bank said this week it will continue to chart its own course on interest rates, maintaining a pause on rate increases and the 4.50% ceiling it established on January 25 despite a continuation of rate hikes by the Federal Reserve.

However, BOC offered a nuanced signal that it could change course if inflation doesn’t decline fast enough, indicating it hasn’t abandoned a target of reducing inflation to 2%—the same target the Federal Reserve is aiming for.

“[BOC] expects CPI inflation to fall quickly to around 3% in the middle of this year and then decline more gradually to the 2% target by the end of 2024,” the bank said in a news release.

In a speech after the announcement, Tiff Macklem, a Bank of Canada governor, left the door ajar to a rate hike, the Toronto Star reported.

“If monetary policy is not restrictive enough to get us all the way back to the 2% target, we are prepared to raise the policy rate further to get there,” Macklem said.

Statistics Canada reported last month that the annual rate of inflation in Canada dropped to 5.2% in February, down from a peak of 8.1% last June.

“This is good news, but it’s not job done,” Macklem said.