According to a recent Reuters poll, Canada’s housing market is poised for further growth in 2024 and 2025, buoyed by strong demand and limited supply
Despite expectations of delayed interest rate cuts, home prices in Canada are on an upward trajectory after a 14% decline from their early 2022 peak.
This drop was primarily attributed to higher mortgage rates and exorbitant prices, dissuading potential homebuyers. The recent decline, combined with expectations of rate cuts by the Bank of Canada, has reignited interest among buyers.
Analysts anticipate a 1.2% increase in average home prices for 2024 following a 5.5% decline in the previous year. The positive trend is expected to continue into 2025, with a forecasted climb of 3.3%. The market’s resurgence during winter has heightened competition among buyers, and experts believe a pivot towards rate cuts in the mid-year could accelerate the recovery.
However, persistent affordability challenges are likely to temper the pace of the market’s rebound, emphasizing a gradual liftoff. Robert Hogue, Assistant Chief Economist at RBC, notes that despite the anticipated surge in demand once confidence returns, affordability constraints will shape a measured recovery in the housing market.
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