Canada Real Estate Market Forecast 2024 | Economists Predict Rebound

Discover the latest insights on the Canadian real estate market forecast for 2024. Learn about the potential rebound and the impact of the Bank of Canada's key interest rate.

The Canadian real estate market is expected to see a rebound in 2024, following a year of caution and shifting expectations due to rising borrowing costs. Economists believe that the potential for a rebound is largely dependent on forecasts that the Bank of Canada could begin cutting its key interest rate from the current level of five per cent as early as the second quarter of this year.

According to the latest report from the Canadian Real Estate Association, there have been softer market conditions since the end of last summer, with sellers joining potential buyers on the sidelines. While price declines have mainly been observed in Ontario, home prices were also starting to soften late in the year in the Fraser Valley, Winnipeg, and Halifax. However, prices were mostly holding firm or continuing to climb in provinces such as Alberta, Saskatchewan, New Brunswick, Prince Edward Island, and Newfoundland and Labrador. In Vancouver, the market has slowly shifted thanks to modest price improvements in recent months.

The Bank of Canada has held rates steady over three rounds of decisions as inflation continued to moderate, but the central bank has said it could still raise rates even as forecasters widely expect the next move to be a cut. With housing activity remaining fairly sluggish to start 2024, but inflation also slowing, 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. This could bring more activity and small increases in prices over the second half of the year, as forecasters anticipate home prices moving gradually higher across all markets.

The Canadian real estate market is expected to see a rebound in 2024, with the potential for interest rate cuts by the Bank of Canada contributing to increased housing activity and gradual price improvements across all markets.