Canadian housing markets have remained quiet since the Bank of Canada’s interest rate hikes last summer. Interest rates have been the major factor affecting markets over the last few years, and this is expected to continue in 2024 and 2025.
Expectations around the timing of the first 2024 rate cut have recently been pulled forward. The expected number of total cuts to interests rates (in terms of basis points) in 2024 have also increased in the last few months. Combined with ever-increasing pent-up demand for housing in Canada, the forecast for housing sales activity this year has been raised. Given its starting point is lower than previously expected, the 2024 annual forecast remains relatively unchanged.
Some 489,661 residential properties are forecast to trade hands via Canadian MLS® Systems in 2024, a 10.4% increase from 2023. The bigger sales gains in 2024 are expected to come from provinces where housing demand is strong (Alberta in particular), along with provinces that are expected to see a rebound from historically low sales volumes (British Columbia, Ontario, Nova Scotia).
The national average home price is forecast to climb 2.3% on an annual basis to $694,173 in 2024. Alberta, Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador are all forecast to see price gains in excess of the national increase. British Columbia and Ontario are forecast to see prices largely remain flat.
National home sales are forecast to climb another 7.3% to 525,498 units in 2025 as interest rates continue to decline and approach more normal or “neutral” levels. This forecast would still have activity running below its long-term trend.
The national average home price is forecast to rise by 4% from 2024 to $722,063 in 2025, as demand continues to strengthen amid ongoing supply constraints. Prices in Alberta and on the East Coast are again expected to outperform other parts of Canada in 2025.
