The ‘great adjustment’: Canadians to adapt to new reality as housing market returns to near-normal in 2024
After years of unprecedented irregularity, Canadians may see the real estate market return closer to normal in 2024. According to the Royal LePage Market Survey Forecast, the aggregate 1 price of a home in Canada is set to increase 5.5% over year to $843,684 in the fourth quarter of 2024, with the median price of a single-family detached property and condominium projected to increase 6.0% and 5.0% to $879,164 and $616,140, respectively.
“Looking ahead, we see 2024 as an important tipping point for the national economy as the majority of Canadians acknowledge that the ultra-low interest rate era is dead and gone,” said Phil Soper, President and CEO, Royal LePage. “We believe that the ‘great adjustment’ to tolerable, mid-single-digit borrowing costs will have a firm grip on our collective consciousness after only modest rate cuts by the Bank of Canada.”
Home prices are expected to rise next year in all major markets across the country, with Calgary forecast to see the greatest gains. Throughout the second half of 2023, while prices have been declining in other cities, the Calgary real estate market has bucked the trend continuing on an upward price trajectory.
Royal LePage’s forecast is based on the prediction that the Bank of Canada has concluded its interest rate hike campaign and that the key lending rate will hold steady at five% through the first half of 2024. The central bank is expected to start making modest cuts in late summer or fall of next year. Meanwhile, several major financial institutions have already begun offering discounts on fixed rate mortgages.