As we look ahead to 2024, there are numerous housing market predictions being made. The Canadian housing market is an area of great interest and anticipation for many individuals and investors. The housing market in Canada is expected to continue its upward trajectory. This is driven by various factors, such as population growth, low mortgage rates, and increased demand for housing. With a high search volume for terms like “Canada housing market 2024,” it is evident that people are seeking insights into the market’s future trends and performance.
While the future cannot be predicted with absolute certainty, the year 2024 holds promise for those interested in the Canadian housing market. Whether you are a homebuyer, a real estate investor, or simply a curious learner, keeping an eye on the evolving trends of the Canadian housing market in 2024 is crucial.
Canada Housing Market 2024 Trends with Statistics
According to the latest report from the Canadian Real Estate Association (CREA), the Canadian housing market in 2024 shows mixed trends as it moves into a gradual recovery phase. Home sales saw a 3.7% increase between December 2023 and January 2024, continuing a positive momentum from late 2023. This improvement reflects a market that is regaining strength after the weaker performance observed in the second half of 2023.
However, despite these early signs of recovery, the market remains largely in a holding pattern. In August 2024, home sales increased by only 1.3% compared to the previous month, and new listings also rose modestly by 1.1%. The market has not experienced dramatic shifts in favour of sellers, with the national sales-to-new listings ratio hovering around 53%, indicating a balanced market rather than a clear seller’s market.
Prices have remained relatively stable in 2024, with the MLS® Home Price Index showing little change throughout the year. This reflects a housing market that is still processing the effects of previous years’ slowdowns. While further interest rate cuts are expected to boost demand later in 2024, the market is not yet in full recovery mode. The Canadian housing market in 2024 is showing signs of gradual improvement, but it is not yet at a point where sellers have significant leverage due to demand outpacing supply. The market remains balanced, with continued monitoring required to gauge the full extent of recovery as the year progresses.
Underlining Pointers of Canadian Housing 2024
The Canadian housing market in 2024 continues to experience a recovery, albeit at a slow and steady pace. The following key points offer insights into the current state of the market:
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- Gradual Recovery in Sales: In early 2024, national home sales experienced moderate growth. For instance, home sales rose by 3.7% between December 2023 and January 2024, building on the 7.9% month-over-month increase recorded in late 2023. This reflects a gradual recovery, although overall activity remains about 9% below the 10-year average.
- Stable but Slightly Declining Prices: The MLS® Home Price Index (HPI) has remained mostly flat throughout 2024, with minor month-over-month changes. By August 2024, prices were down by 3.9% year-over-year, and overall, prices have been stable since the beginning of the year.
- Modest Increase in New Listings: The number of newly listed properties increased by 1.1% in August 2024, continuing a trend of cautious growth in supply. Despite this increase, active listings remain below historical averages, contributing to the market’s balance between supply and demand.
- Balanced Market Conditions: The sales-to-new listings ratio in 2024 hovered around 53%, indicating a balanced market rather than a clear buyer’s or seller’s market. Inventory levels also remained stable, with 4.1 months of inventory by August 2024, slightly below the long-term average.
- Interest Rate Environment: The Canadian housing market in 2024 has been influenced by interest rate cuts, with the Bank of Canada reducing rates twice by mid-year. These cuts are expected to stimulate demand, although many prospective buyers may still hold off for improved affordability.
According to the Canadian Real Estate Association (CREA), the Greater Toronto Area (GTA) and Greater Vancouver stood out as regions with notable sales gains, contributing to overall home sales across Canada. These key points from the Canadian housing report provide valuable insights into the performance of the housing market in 2024. They offer a comprehensive view of sales activity, listing trends, price fluctuations, and regional variations. This can assist individuals and investors in making informed decisions within the dynamic and evolving Canadian housing market.
New Listings
In 2024, the Canadian housing market showed modest movement in new listings. By August 2024, new listings increased by 1.1% compared to the previous month, reflecting a gradual rise in supply. However, the overall number of active listings remains below the long-term average. The sales-to-new listings ratio was 53% in August, suggesting a balanced market. While some regions, like Calgary, saw a significant boost in new listings, other areas, including the Greater Toronto Area (GTA), saw a decline. This slow increase in new listings may reflect cautious optimism among potential sellers as they wait for more favourable conditions in the latter half of the year.
Inventory Home Prices
In 2024, national inventory levels remained relatively stable, hovering around 4.1 months as of August, a slight drop from the previous month. This inventory level remains below the long-term average of around five months, which could indicate a tighter market moving forward. The balance in supply and demand has kept home prices relatively stable, with the MLS® Home Price Index (HPI) remaining flat throughout most of 2024, showing only minor fluctuations.
Home Prices
Home prices in 2024 have seen minimal month-over-month changes, indicating that the Canadian housing market has entered a more stable phase. By August 2024, the Aggregate Composite MLS® HPI was 3.9% lower than in August 2023, but overall prices have remained steady throughout the year. Price declines are still more pronounced in certain regions, such as parts of Ontario and British Columbia, while cities like Calgary, Regina, Saskatoon, and St. John’s have maintained stable pricing.
National Average Home Price
In 2024, the national average home price remained almost unchanged from August 2023, reflecting the stabilisation of the market. The actual national average home price was slightly higher than in January, but the overall year-over-year growth has been minimal. The high demand and sales activity in major markets like the GTA and Greater Vancouver continue to drive the national average higher. When these markets are excluded, the national average price remains significantly low.
Speculation on Canada Housing Market
The Canadian housing market in 2024 continues to attract attention amid discussions of potential corrections or downturns. However, recent economic data and expert predictions offer a more balanced outlook, with no immediate signs of a market crash.
While 2023 was marked by concerns about the housing market bottoming out, particularly following significant price increases during the pandemic, the market shows signs of stabilisation in 2024. RBC’s earlier projection of a 15% price decline from peak to trough has largely played out, with much of the predicted correction already occurring by the end of 2023. In 2024, the market appears to have moved into a “holding pattern,” with home prices flattening and inventory levels remaining low compared to historical averages.
Regional Outlook
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- Ontario and British Columbia: These provinces, which were expected to see the sharpest price declines (19% and 16%, respectively), have already experienced much of the anticipated drop. While prices in certain areas are still down compared to their 2022 peaks, the rate of decline has slowed in 2024. Both markets remain sensitive to economic conditions and interest rates but are no longer in free fall.
- Alberta: Predicted to see a smaller dip of around 6%, Alberta’s housing market has shown resilience. In 2024, cities like Calgary and Edmonton are seeing stable or slightly rising home prices, reflecting the strength of local demand and a balanced market.
Broader Market Sentiment
The market’s correction from its peak is widely viewed as a cyclical adjustment following the pandemic-fueled boom. With interest rates stabilising in 2024 after aggressive hikes in 2022 and 2023, the Canadian housing market is expected to gradually recover as affordability improves. Many experts believe that 2024 will be characterised by cautious optimism, with fewer dramatic swings in home prices. However, concerns remain around affordability in key markets like the Greater Toronto Area and Vancouver, where demand continues to outpace supply. This has led to ongoing challenges for first-time homebuyers, despite the price corrections.
Canada Housing Interest Rates Tends to Stablise
The Bank of Canada has largely paused its rate hiking cycle as of mid-2024, following several increases aimed at curbing inflation throughout 2022 and 2023. While there are no immediate rate-cut plans, experts predict such moves could happen in late 2024 or early 2025. This might be due to economic conditions, including inflation, continuing to improve. This stabilisation in interest rates is expected to provide some relief to the housing market, but it is unlikely to trigger a significant surge in home sales or price growth in the short term.
If longer-term bond yields begin to decline later in 2024, it could be a positive indicator for a broader recovery in the housing market. However, the interest rate environment is expected to remain somewhat restrictive for the foreseeable future, limiting the potential for rapid market growth. While the stabilisation of rates should help ease pressure on homebuyers, the overall housing market in 2024 is likely to experience gradual, rather than rapid, improvement.
Future Holds Convenient Canadian Housing Prices
In 2024, the Canadian housing market is projected to see a more gradual price adjustment than in previous years. While some regions may still experience price declines, these are expected to be more modest compared to the sharp corrections observed in 2022 and 2023. RBC and other major institutions suggest that the Canadian Real Property Solutions (RPS) Home Price Index (HPI) will likely remain relatively flat or see minor declines in certain regions.
The largest downside risks in 2024 continue to be in British Columbia and Ontario, particularly in expensive markets like Vancouver and Toronto, where affordability remains a key issue. Some forecasts indicate that these provinces could still see price declines of up to 5% from their peak levels, though this is significantly less severe than the declines experienced from 2022 to early 2023. By contrast, markets in Newfoundland and Labrador and other more affordable regions are expected to be less volatile, with only minor price adjustments.
Affordability Challenges: Even with stabilising prices, many prospective buyers continue to face constraints due to high mortgage rates and lingering economic uncertainty. As a result, a swift market rebound is unlikely, and buyers’ budget constraints will continue to temper demand throughout the year.
Solid Market Norms Comparison with the Correction
Since the market correction that began in March 2022, the Canadian housing market has stabilised, maintaining solid fundamentals despite ongoing challenges. The correction was largely cyclical, driven by unique factors such as the COVID-19 pandemic and historically low interest rates, which led to unprecedented price growth during the pandemic era. As the market adjusts, it reflects more typical dynamics, but the core strengths remain.
Structural Resilience
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- Low Inventory Levels: Even in 2024, housing inventories remain historically low, particularly in major urban centres like Vancouver and Toronto. This scarcity of homes for sale has helped stabilise prices despite higher borrowing costs. Inventory levels are around 4.1 months, well below the long-term average of five months, contributing to balanced market conditions.
- Population Growth: Canada’s significant population growth is a key factor sustaining the housing market’s strength. Immigration continues to drive demand, with the country experiencing the highest population growth in generations. This influx of immigrants, combined with natural population growth, has bolstered the housing market and will likely continue to sustain demand for housing in the medium to long term.
Market Outlook
While the correction has cooled some of the intense price growth seen in 2020 and 2021, the market remains structurally sound. Demand is expected to remain robust due to strong immigration trends, and the stabilisation of interest rates in 2024 has provided additional support. These factors suggest that the market, though undergoing a correction, is not facing a collapse but rather moving toward a more sustainable equilibrium.
Choosing House Construction for Long-Term Balance
The Canadian construction sector continues to face significant challenges in 2024, as it grapples with increasing the housing supply to address the growing affordability crisis. Current estimates suggest that Canada must build at least 270,000 to 300,000 new units annually by 2025 to keep pace with demand driven by population growth and high immigration levels. However, achieving this ambitious target remains uncertain due to ongoing labour shortages in the construction industry. The sector continues to face a shortage of skilled workers, which is hampering its ability to ramp up production to the required levels. The lack of available labour and rising material costs have slowed construction activity.
In 2024, industry experts are expressing concerns over whether the construction industry can meet these goals, especially as demand continues to outstrip supply in cities like Toronto and Vancouver. Without significant intervention—such as government incentives for training new workers and improving productivity—the shortage of housing will likely persist, further exacerbating affordability issues for Canadians.
Experts Predictions on Canadian Provincial Housing
As the Canadian housing market stabilises in 2024, experts remain cautiously optimistic about the future. The market has already undergone significant corrections from the pandemic-induced boom, with housing prices and sales volumes adjusting across the country. However, several key factors are expected to influence the market’s recovery and long-term growth.
Current Market Conditions
Since the market peaked in early 2022, home prices and sales have declined substantially. Desjardins’ economic team previously noted that sales dropped over 38% from their February 2022 highs, and average home prices fell by nearly 20%. The benchmark home price, adjusted for market composition, saw a smaller decline of around 14%. By 2024, housing activity had entered a more balanced territory. The national market was no longer heavily skewed in favour of sellers, as it was at the height of the pandemic. Falling interest rates, modest improvements in affordability, and the stabilisation of new listings have allowed the market to find a more even footing.
Factors Shaping Recovery
- Falling Interest Rates: After several interest rate hikes throughout 2022 and 2023, the Bank of Canada has paused further increases and may introduce rate cuts later in 2024. This has relieved buyers who are priced out of the market due to higher borrowing costs.
- Immigration and Population Growth: Canada’s immigration levels have been at their highest in decades, which continues to drive demand for housing, particularly in major urban centres like Toronto, Vancouver, and Montreal. This sustained demand is expected to fuel long-term growth despite short-term market corrections.
- Provincial Variations: While the overall national market is recovering, each province is expected to experience different outcomes.
- Ontario and British Columbia are predicted to face ongoing affordability issues due to high demand and limited housing supply, though price declines in these provinces have helped alleviate some pressure.
- Alberta and Saskatchewan, with more affordable housing markets, are expected to see modest price increases and steady sales activity as economic growth in these regions remains strong.
Outlook for 2024 and Beyond
Experts predict that the Canadian housing market will continue to recover throughout 2024, with home prices stabilising and sales activity picking up. Although a swift rebound is unlikely, the market will gradually regain strength. By the second half of 2024, lower borrowing costs and increased immigration should drive stronger housing demand. While the market correction has posed challenges, the long-term outlook remains positive, especially as the impact of previous rate hikes fades and the broader economic environment improves. Canada’s structural housing shortage and population growth will continue to support demand, making the market poised for gradual recovery rather than a dramatic surge.
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Frequently Asked Questions (FAQs)
Will house prices go down in 2024 Canada?
The direction of house prices in 2024 Canada is uncertain and can be influenced by various factors such as economic conditions, government policies, and market dynamics. While predictions and forecasts can provide insights, they are subject to change based on evolving circumstances. It is advisable to consult reputable sources and experts to stay informed about the latest developments in the Canadian housing market.
What is the forecast for the Canadian housing market?
The forecast for the Canadian housing market is influenced by a range of factors and can vary depending on the specific region and market conditions. It is essential to consult reliable sources such as real estate associations, economic analysts, and housing market reports for the most up-to-date and accurate forecasts. These sources provide insights into market trends, supply and demand dynamics, interest rates, government policies, and other relevant factors that shape the forecast for the Canadian housing market.
What is the CMHC forecast for 2032?
As an AI language model, I don't have access to real-time data or the ability to browse the internet. The forecast provided by the Canada Mortgage and Housing Corporation (CMHC) for 2032 may not be available as it pertains to a specific future year. It is recommended to visit the official CMHC website or refer to their publications and reports for any forecasts or insights they may have for the housing market in 2032 or beyond.
What is the average duplex house cost in Canada?
The average cost of a duplex house in Canada can vary significantly depending on factors such as location, size, condition, and local market conditions. Different provinces, cities, and neighbourhoods can have varying price ranges. It is best to consult real estate listings or engage with local real estate agents who have access to current market data and can provide specific information about the average cost of duplex houses in the desired area of interest.
