The Canadian housing market remained essentially unchanged for March. However, zooming in on the last week of the month, there was a flurry of activity, indicating that Canadians are finally ready to buy and sell for spring.
According to the March report from the Canadian Real Estate Association (CREA), national home sales rose 0.5 per cent for the month. Meanwhile, the composite home pricing index nosed slightly to 0.3 per cent.
However, weekly tracking showed an increase in new supply around the second week of March, leading to more sales in the last week. There was also a jump in listings in the first week of April.
“We’ll have to wait for the April data to really understand how buyers are responding to all these new properties for sale, but if you look at last spring as a guide and add to that record population growth in the last year and a central bank that is far more likely to cut this summer than raise like it did last year, it could get interesting,” said Shaun Cathcart, CREA’s senior economist.
“Will the story be high interest rates keeping a lot of people on the sidelines this year, or the much expected and anticipated first rate cuts enticing a lot of people back into the market? Probably a bit of both.”
CREA’s quarterly forecast suggests a rebound in residential sales
Based on the first interest rate cut coming in the second half of the year, CREA is forecasting that Canadians will return to the housing market in 2024.
CREA predicts 492,083 residential properties will trade hands via Canadian MLS systems in 2024, a 10.5 per cent increase from 2023.
The national average home price is forecast to climb 4.9 per cent to $710,468 in 2024.
Meanwhile, national home sales are predicted to jump another 7.8 per cent to 530,494 units in 2025 as interest rates may decline and approach “neutral” levels.
However, for those hoping that home prices will drop due to increased activity, prepare for disappointment. The national average home price is forecast to rise by seven per cent from 2024 to $760,120 in 2025.
