Homeownership could become more attractive for many Canadians as conditions change
Building up on the relative stability following the Bank of Canada’s freeze of its rate-hike campaign, market observers are now expecting the Canadian housing market to post considerable recovery in 2024.
In particular, promising signs of economic strength, coupled with the moderating effect of high interest rates on housing costs, will make ownership more attractive for many Canadians.
“We’re still riding some rocky seas … [but] I think that we’re going to see consumer confidence increase, at least partially, probably by quarter two realistically,” Tim Hill of RE/MAX All Points Realty told BNN Bloomberg. “I think we’re going to start seeing people talking about making those moves again for 2024.”
Rishi Sondhi of TD Bank said that observers are closely “watching for a turning point in the market.”
“We’ve had some, I would say, weaker sales and price activity over the past few months,” Sondhi said. “We’re getting some indications that the market, at least from a demand perspective, is starting to turn around.”
Business sentiments in Canada have declined, with companies anticipating slower sales growth as 2024 approaches, according to the Bank of Canada's latest business outlook survey.
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 18, 2023
Read more: https://t.co/NLNerFvDh1#mortgageindustry #businessnews #mortgage #economy
CIBC deputy chief economist Benjamin Tal said that while Canada is now essentially in a recession on a per capita basis, this doesn’t tell the full story when it comes to the housing market’s prospects this year.
Tal said that 2024 will more likely be a “tale of two halves.”
“The first half will be mediocre at best, possibly a recessionary period,” he said. “The second half will be much better, that’s when we expect the interest rates to start going down.”
RBC assistant chief economist Nathan Janzen said that slowing inflation will be a major factor in housing activity, particularly considering the “fairly sluggish” start in 2024.
“What that means is the Bank of Canada is getting closer to the point where they can start taking their feet off the monetary policy brakes of the economy and inch closer to a pivot to interest rate cuts,” Jenzen said.
