High inflation and rising interest rates were the property market’s big news the past year. Due to a shortage of properties and rising loan rates, the Canadian real estate market presented significant difficulties for investors and homebuyers. This pattern has persisted until 2023, and as a result, activity levels are still down from early 2022.
Depending on when and how much those things shift in the other way, the market in 2023 will change. The housing market is still experiencing an increase in demand, while supply is still the major problem. It all comes down to the Bank of Canada and how soon they can bring inflation under control and lower borrowing prices, as it will determine the rental and real estate market in 2023.
What 2023 Holds for the Future of Real Estate in Canada?
According to a recent Canadian Real Estate Association (CREA) prediction, the average price of homes would drop 5.9% to $662,103 in 2023 before significantly increasing in 2024.
The current inventory levels are worrying, which is very intriguing because a road toward a probable recession has only occurred with a significant increase in home inventory.
In 2023, 495,858 transactions are anticipated to be completed using Canadian MLS Systems, which is a 0.5% decline from 2022.
As markets begin to recover, a 10.2% increase in home sales is anticipated nationwide in 2024, but this would still be below the numbers for 2020 and 2021.
How Buyers and Investors are Coping and Planning This Year?
Although the market is favourable for sellers, purchasers will only be passive for a short time.
People will eventually reach a point where they must move on with their plans or consider buying instead of renting because prices are so high. Possible movement from renting to owning is predicted at large towards the end of the spring this year.
The Canadian Housing Market Outlook
Across Canada, home prices remain mixed with more expensive markets, such as British Columbia, and real estate, like bungalows for sale in Mississauga, and Ontario, is cooling off. In the meantime, data from CREA shows that the price of homes has been much more stable in Alberta, Saskatchewan, Newfoundland, and Labrador, with Quebec and the Maritime provinces falling somewhere in between.
Whether the anticipated demand for housing occurs in 2023 or 2024, the need for supply is coming.
CREA also released figures for December 2022, which showed that the national average monthly home price closed the year down 12 percent at $626,318. The MLS Home Price Index was down 7.5 percent over December 2021.
Canada’s Real Estate in the Coming Months of 2023
The home market downturn impacts many families. Even though many Canadian families are struggling because of prices, the market is expected to stand back on its ground towards the close of 2023. Once the market stabilises, it will help people find affordable living options. In the coming 18 months, housing sales and prices will undoubtedly decline.
The Canadian Bank of Commerce typically uses the housing market to fight inflation. The real estate slowdown will reduce inflationary pressures to the point where the Bank will be able to roll back rate increases next year. When Canada’s housing market stabilises, investing will be more affordable and convenient.
