The Canadian real estate market could face a cooling this fall as potential buyers and sellers wait to see where the Bank of Canada’s interest rate trajectory goes, according to a new survey released Tuesday.
Re/Max Canada said in a report that home prices are expected to remain flat nationally from August through the end of the year, according to surveys of the brokerage’s own agents.
The lack of available inventory in most real estate markets and interest rates at their highest levels in more than 20 years should combine to result in a “softer” market this fall, according to the Re/Max report.
Uncertainty about the direction of the Bank of Canada’s key rate next (the central bank’s next decision is scheduled for Wednesday) continues to drive many decisions among buyers and sellers, according to a Re/Max poll. .
The brokerage called on Leger to survey more than 1,500 Canadians in July after the Bank of Canada raised rates by a quarter point that month.
One in three respondents interested in buying or selling a home in the next 12 months said they would wait to see how interest rates move before taking action.
Just over half (51 percent) said further rate hikes this year would not change their financial situation or affect their plans to buy or sell.
In total, one in ten Canadians plan to buy a home in the next 12 months, according to Re/Max.
Despite an overall decline in home prices nationwide since the pandemic market peaked in February 2022, affordability issues continue to prevent many young Canadians from accessing homeownership.
Re/Max said the lack of affordable housing leads more than half of Gen Z respondents (55%) and 49% of millennials to change their housing plans in some way.
Inventories have been strapped this year, the report notes, with 74.1 percent of markets reporting a year-over-year decline in housing stock from January to July.
Even though Re/Max expects little movement in home prices nationwide, some regions are expected to experience growth through 2024.
Prices are expected to rise from August through the end of the year in the Greater Toronto Area (up 2.5 per cent), Moncton, New Brunswick (up 3 per cent), Calgary (up 4.5 per cent) and Sudbury, Ontario. (up five percent).
Re/Max, meanwhile, is calling for lower housing prices in Halifax (down 1 percent), Greater Vancouver (down 2 percent), Kelowna, B.C. down 3 per cent) and in Ontario’s Durham Region (down 5 per cent). ) before the end of 2023.
The Leger poll has a margin of error of +/- 2.5 percent, Re/Max said.
© 2023 PKBNEWS, a division of Corus Entertainment Inc.