2024 will be an "important tipping point" for the economy and the housing market
Royal LePage is expecting potential reductions in the Bank of Canada’s interest rate to propel a 5.5% annual increase in the national aggregate home price during the final quarter of 2024.
The aggregate level is anticipated to reach $843,684 by Q4, with the median price for a single-family detached property likely to grow by 6% to reach $879,164. Condo units are expected to see a 5% rise in values, reaching $616,140.
“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, president and CEO 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 Bank of Canada.”
“I think it goes to show that longtime beneficiaries of this housing market are not being shaken by this decline in home prices,” John Shmuel of RATESDOTCA.
— Canadian Mortgage Professional Magazine (@CMPmagazine) December 8, 2023
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All major markets are expected to see an upward trajectory in prices in 2024. Calgary stood out as the forecasted leader in gains with a projected 8% increase.
Royal LePage said that compared to other cities experiencing price declines during the latter half of 2023, Calgary has exhibited resilience.
“For the last year, many Canadians have been fixated on the idea of interest rates needing to come down significantly before they can afford to enter or re-enter the housing market,” Soper said. “Acceptance that a mortgage rate of 4% to 5% is the new normal should untether pent-up demand as first-time buyers, flush with savings collected during the extended down market in housing, regain the confidence to go home shopping.”
