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Canada’s housing market could face a chill this fall as prospective buyers and sellers wait to see where the Bank of Canada’s interest rate path will head, according to new polling released Tuesday.
Re/Max Canada said in a report that home prices are expected to remain flat nationally from August until the end of the year, according to surveys of the brokerage’s own agents.
A lack of available inventory in most housing markets and interest rates sitting at their highest levels in more than 20 years are expected to combine for a “softer” market this fall, Re/Max’s report said.
Uncertainty about where the Bank of Canada’s policy rate heads next — the central bank’s next decision is set for Wednesday — continues to guide many decisions among buyers and sellers, Re/Max polling shows.
The brokerage tapped Leger to survey more than 1,500 Canadians in July after the Bank of Canada’s quarter-point rate hike that month.
One in three respondents who were interested in buying or selling a home in the next 12 months indicated they’d wait to see how interest rate changes play out before acting.
A little over half (51 per cent), meanwhile, said further rate increases this year would not change their financial situation or affect their plans to buy or sell.
All told, one in 10 Canadians are planning to buy a home in the next 12 months, according to Re/Max.
Despite an overall decline in national housing prices since the pandemic-era market’s peak in February 2022, affordability challenges continue to box many young Canadians out of home ownership.
Re/Max said a lack of affordable housing inventory is leading more than half of Gen Z respondents (55 per cent) and 49 per cent of millennials to change their housing plans in some way.
Inventory has been strapped this year, the report noted, with 74.1 per cent of markets reporting year-over-year declines in housing stock from January to July.
While Re/Max expects little movement nationally in home prices, some regions are forecast to see growth heading into 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, N.B. (up three per cent), Calgary (up 4.5 per cent) and Sudbury, Ont. (up five per cent).
Re/Max, meanwhile, calls for house prices to decline in Halifax (down one per cent), the Greater Vancouver Area (down two per cent), Kelowna, B.C. (down three per cent) and Ontario’s Durham Region (down five per cent) before the end of 2023.
The Leger polling came with a margin of error of +/- 2.5 per cent, Re/Max said.
More to come.
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