Inventory issues and interest rates will have a significant impact on market activity during the latter part of 2023, RE/MAX says
The intensity in the Canadian real estate market is likely to dial down a notch this fall with average sale prices across all residential asset classes anticipated to remain flat, according to RE/MAX.
The main driver of the slowdown will be the market’s perennial inventory issues and the interest rate climate, with the Bank of Canada’s policy rate at a multi-decade high.
The latter factor is especially important as younger Canadians, who now account for a significant share of buyers, are more likely to rely on BoC interest rate announcements to determine the best time to enter into the housing market (47% of Gen Z-ers and 52% of millennials), according to a recent Leger survey commissioned by RE/MAX.
“If the fall market is an early indicator for 2024 activity, we may see a very active first quarter as buyers and sellers take advantage of easing prices into the earlier part of next year,” said Christopher Alexander, president of RE/MAX Canada.
Lauren Haw of Zoocasa, anticipates that the real estate market will experience increased activity once fall begins, despite a slight cooling in national sales in July. https://t.co/zrbZWrehUg#mortgageindustry #housingmarket #houseprices
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 30, 2023
Housing supply at top of the mind for many Canadians
The Leger survey also found that the lack of affordable housing inventory is compelling 55% of Gen Z-ers and 49% of millennials to change their housing plans.
As much as 74.1% of RE/MAX broker regions have reported inventory decreases of 1.2% up to 40% between January and July on a year-over-year basis.
“The Canadian housing market has historically given homeowners great returns and solid financial security,” said Elton Ash, executive vice president of RE/MAX Canada.
“We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage in every city, town, and neighbourhood across the country.”
