Royal LePage just released its quarterly Home Price Update and Market Forecast, and the outlook for residential buyers in the coming months is not very good.
The brokerage’s aggregate home price is based on “a weighted model using median prices and including all housing types” — think condos, homes, and varying apartment formats.
Experts reported that the aggregate home price in Canada increased 4.3% year over year to $812,100 in the first quarter of this year.
This number is expected to increase by 9% in the fourth quarter of 2024 compared to Q4 of last year when it was $789,500. That means that by fall/winter, the national aggregate home price is projected to hit $860,555.
Royal LePage
At least 89% of regions in the report “recorded quarterly price appreciation in the first three months of the year, ahead of the traditionally busy spring market period.”
On Wednesday, the Bank of Canada held the overnight key rate at 5%. It was the sixth consecutive rate hold, but a dip could be very likely in 2025, as inflation rates are projected to reach central bank targets.
A quarterly market analysis suggests that sidelined buyers are “rebooting their real estate purchase plans ahead of expected interest rate cuts.”
If you’ve already invested in property to sell, you’re in luck.
Phil Soper, president and CEO at Royal LePage, believes that many consumers who have the capacity to transact have accepted and adapted to the higher-borrowing-cost environment. This especially holds true for first-time buyers.
He says this is why we’re experiencing “modestly rising” home prices.
“Once the central bank does make a move and that first highly anticipated cut to rates is made, even if it is only by 25 basis points, I expect we will see the price appreciation curve steepen upwards when the highly rate-focused crowd jumps into the market,” Soper said in an email to Daily Hive.
A breakdown of major markets shows that aggregate home prices in Greater Toronto and Montreal are expected to increase 10.0% and 8.5%, respectively, year over year in Q4 2024. These are “the highest forecasts of all major regions.”
Home prices in the Greater Toronto Area will likely surpass Vancouver this year.
“Among major regions, Calgary recorded highest year-over-year price appreciation (9.7%) for the second consecutive quarter; increased 1.9% on a quarterly basis,” the report further states.
“Given the strong start to 2024, the cadence of the market for the balance of the year points to a normally busy spring market that will lead into an uncomfortably busy fall,” said Soper. “It is clear we are rapidly transitioning away from a buyers’ market and back to an environment where the seller has the upper hand.”
According to the Canadian Real Estate Association’s (CREA) March 2024 report, released Friday, the national average home price is $698,530, up 2% from last March.