What’s Next for the Canadian Housing Market Outlook 2024
The Canadian housing market has been through a lot of changes in recent years. High interest rates, inflation, and shifting buyer preferences have shaped the market.
As we move into 2024, many are wondering: what’s next for the housing market in Canada?
Well, the Canadian housing market is changing with new trends. After some uncertain times, experts are watching closely.
It will help buyers and sellers plan better. Interest rates, which affect how much homes cost, might change, affecting how people buy or sell.
However, new rules and changing demands in different areas will also impact the market. If you want to buy, sell, or invest in a home, knowing these trends will help you make smart choices. Keep an eye out for the latest updates and what they mean for you.
Overview of the Canadian Housing Market
Canada’s housing market has been a hot topic due to its rapid changes. Over the past few years, home prices have soared, driven by high demand, low inventory, and strong economic fundamentals.
However, rising interest rates, economic uncertainties, and evolving buyer needs are now influencing the market in new ways.
Canadian Housing Market Statistics – July 2024
Property Type | Average Selling Price (July 2024) | Year-over-Year Change |
Overall Home Price | $724,800 | Decreased by 3.9% |
Single-Family Home | $801,600 | Decreased by 3.7% |
Townhouse/Multiplex | $666,900 | Decreased by 3.6% |
Condo | $526,500 | Decreased by 3.2% |
Average Rent | $2,156 | Increased by 7.0% |
1. Composite Home Prices
The composite home price represents the average price of all home types in Canada.
In 2024, experts predict a slow recovery in home prices. The market will stabilize, and prices could rise by 3-5%.
Factors like high demand and limited housing supply in cities will drive these increases. However, the recovery will vary across regions.
In July 2024, the average selling price of a home in Canada was $724,800. This represents a 0.8% drop from the previous month. Over the past year, home prices across Canada have fallen by 3.9%.
Cities like Toronto and Vancouver may see higher price growth due to their housing shortages. In contrast, more affordable markets like Calgary and the Prairies may experience moderate growth.
2. Single-Family Home Prices
Single-family homes have always been popular in Canada. They provide more space and privacy, making them attractive to families.
However, the prices of these homes have fluctuated in recent years. In 2024, single-family home prices may increase by 2-4%.
Several factors will contribute to this:
- Return to City Living: Many people are moving back to cities as remote work declines. This will increase demand for homes in urban areas.
- High Immigration: Canada plans to welcome 500,000 new immigrants each year. Many of them will need housing, adding pressure to the market.
- Limited Supply: In big cities, there aren’t enough single-family homes to meet the demand. This shortage will keep prices from dropping.
In July 2024, the average price of a single-family home in Canada was $801,600. This is a 0.9% drop from the previous month. Over the past year, single-family home prices have fallen by 3.7%.
3. Townhouse and Multiplex Prices
Townhouses and multiplexes (like duplexes and triplexes) are popular choices for people who want more space but can’t afford a single-family home.
These homes are typically more affordable and located in urban areas, making them a great option for young families and first-time buyers. In July 2024, the average price of a townhouse in Canada was $666,900. This marks a 0.8% drop from the previous month. Over the past year, townhouse prices have decreased by 3.6%.
Key reasons for this price growth include:
- Growing Buyer Interest: Many people are shifting their focus to townhouses and multiplexes as more affordable alternatives to detached homes.
- Increased Housing Density: Some cities are encouraging the construction of multiplex homes to help address housing shortages. This could lead to a rise in demand for these property types.
4. Condo Prices
Condos are usually the most affordable type of housing in Canada’s major cities. They are especially popular among first-time homebuyers, young professionals, and investors.
However, condo prices have faced challenges due to rising interest rates and changes in buyer preferences.
In July 2024, the average price of a condo in Canada was $526,500. This is a 0.5% drop from the previous month. Over the past year, condo prices have fallen by 3.2%.
Several factors will influence condo prices in 2024:
- Increased Urban Demand: More people are moving back to cities, which will increase the demand for condos. Young professionals and downsizers will especially look for these homes.
- Immigration: With hundreds of thousands of immigrants expected to arrive in Canada, many will choose condos as their first homes in the country.
- Strong Rental Market: The high cost of homeownership is pushing more people to rent. Condos will remain a popular investment for rental income, which could drive up prices.
What to Expect in the Canadian Housing Market in 2024?
1. Recovery is Coming: The Canadian Real Estate Association (CREA) expects the housing market to bounce back soon. Despite a recent slowdown, experts predict improvement in the next few months.
2. Recent Slowdown: In July, the market slowed with fewer home sales. Even though interest rates were cut several times, the market is not crashing; it’s just taking a brief pause.
3. High Home Prices: House prices in Canada remain high, making it tough to buy. Even with lower interest rates, borrowing money is still expensive. Buyers may stay cautious until costs are more manageable.
4. Different Markets Across Canada: Housing markets vary by region. Calgary and the Greater Toronto Area (GTA) saw fewer sales. In contrast, Edmonton and Hamilton-Burlington saw increases.
5. More Homes for Sale: In July, the number of houses for sale in Canada increased. This shows more sellers are confident. However, the inventory is still low, which might make buying a home more difficult in the future.
6. Cautious Optimism: Experts believe the Canadian real estate market will improve in the latter half of the year with lower interest rates and more buyer interest. The speed and strength of recovery will depend on rates, economic growth, and job conditions.
7. Get Local Advice: For specific insights, talk to a local real estate expert. They can provide detailed information about your local market.
Key Trends Shaping the 2024 Market
Several major trends will affect the Canadian housing market in 2024:
Interest Rates and Mortgage Affordability
In 2024, the Bank of Canada may pause further interest rate hikes. This could bring some relief to homebuyers.
However, mortgage rates will remain high, making it tough for first-time buyers to enter the market. The average 5-year fixed mortgage rate is expected to stay around 6-6.5%.
New Housing Supply
Canada has a housing shortage, especially in its largest cities. In 2024, the government will continue to push for more housing construction.
The federal government has set a target of building 3.5 million new homes by 2030. However, this goal will be difficult to meet.
Some cities, like Calgary and Ottawa, are speeding up the approval process for new housing projects.
Rental Market Trends
Many Canadians are unable to buy homes due to high prices and interest rates.
In cities with tight housing markets, like Toronto and Vancouver, rental prices are expected to rise in 2024.
With immigration levels increasing, demand for rentals will stay strong. This makes investing in rental properties, especially condos, an attractive option for those looking to generate income.
Government Housing Policies 2024
Government policies will continue to shape the housing market. In 2024, the federal government may introduce new measures to improve affordability, such as:
- First-Time Homebuyer Incentives: Programs like the First-Time Home Buyer Incentive (FTHBI) may be expanded to help buyers with down payments.
- Rent Control: Some provinces may introduce stricter rent control measures to protect tenants from soaring rental costs.
What Buyers and Sellers Can Expect in 2024?
For homebuyers, 2024 will still be tough. High interest rates will keep mortgage payments expensive, especially for first-time buyers.
Home prices in Canada are leveling off. This might offer more chances for buyers, especially in areas outside major cities.
For sellers, home prices probably won’t increase as quickly as they did during the pandemic. But, limited housing supply in cities will still help prices go up a bit.
Sellers in cities like Toronto and Vancouver could benefit from strong demand and lots of buyers competing for homes.
Conclusion
Prices for composite homes, single-family homes, townhouses, and condos are all expected to rise.
As we know composite home prices might go up by 3-5%. Single-family homes could rise by 2-4%, while townhouses might see increases of 3-6%. Condo prices, driven by high demand from immigrants and renters, may go up by 4-7%.
But, challenges will still be present. High interest rates will keep home payments expensive, and a lack of available homes in big cities will keep prices high.
However, government efforts to build more homes and offer help to first-time buyers could ease some of the pressure.
Overall, 2024 will probably bring a more balanced housing market. We can expect moderate price increases and ongoing challenges for both buyers and sellers. Join us to get more market updates and expert advice.
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