After the “mania” of 2021 and the “big peak and valley” in 2022, the President of Ray/Max Canada tells Global News that next year could see the “balance” of the national housing market return.
but Christopher Alexander say how high bank of canada Drive Rate of interestAnd when it pauses or returns to more modest moves in its policy rate will determine whether homebuyers and sellers alike feel comfortable getting back into the market.
“That’s the big wild card,” he says.
Canadian home sales rose last month for the first time since February
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Prices to go up outside most expensive markets: Re/Max
Re/Max’s 2023 housing market outlook was released Tuesday, projecting home prices in Canada to decline by an average of 3.3 per cent from the average sales seen in 2022.
On a regional basis, Ontario and western parts of Canada may see further decline, despite relative stability in prices at the national level, according to brokerage forecasts.
Re/Max Canada’s 2023 housing outlook shows prices rising in some markets and falling in others. Exact data was not available for Montreal from Re/Max.
Some cities in Ontario that are particularly vulnerable are the Greater Toronto Area (down 11.8 percent), Barrie (down 15 percent) and Durham (down 10 percent), Re/Max projects, with prices expected to drop sharply.
Parts of British Columbia are also expected to see declines, such as Greater Vancouver (down five percent), Kelowna (down 10 percent) and Nanaimo (down 10 percent as well).
But parts of Atlantic Canada and Alberta are ready for development in 2023, Re/Max hopes.
For example, Calgary is set to see a seven per cent rise in prices, while the average sale price in Halifax could rise by eight per cent next year, its forecast said.
Alexander tells Global News that these markets are benefiting as relatively affordable destinations for those priced out of Ontario and B.C.
Halifax has a “cosmopolitan feel” without the prices of Toronto or Vancouver, he explains.
Calgary, after years of pressure on prices, has “gained hugely” from inter-provincial migration during the pandemic, Alexander says.
“The average selling price is less than half that of Ontario. … You’ve got the Rocky Mountains within an hour and a half of the city. It provides just that,” he says.
“I think for all of those reasons, Calgary will continue to flourish.”
When is housing activity expected to come back?
Most markets that Re/Max has earmarked for price reductions are also expected to see a deceleration in year-over-year sales activity.
Most of the country’s housing markets see a clear recession in the spring of 2022 as the Bank of Canada hikes interest rates.
real estate data for october Sales showed a “slight increase” compared to the previous month, Alexander notes, but it’s too early to say whether this marks the end of a cooling off period.
Both buyers and sellers are waiting to see where the Bank of Canada policy rate will come and how prices will respond, Alexander says, but he argues that this phenomenon cannot last forever.
“On both the buy and sell sides, you’re going to reach a point. I can’t wait any longer,” he says.
“People have kids, they get married, they get divorced and life happens. And that can cause people to come over the edge.
The second thing Re/Max expects activity to pick up next year will be the final peak of the central bank’s current rate hike cycle.
Buyers will feel especially more confident when they see the Bank of Canada either halting rate hikes or returning to more normalized, quarter-percentage-point steps, Alexander says.
“I think you’re going to see buyers taking advantage of this in a big way.”
But no one knows how high the Bank of Canada will eventually take interest rates, and Alexander acknowledges that more tightening could hold back the housing market recovery and lead to “further adjustments” in price.
He says he is optimistic that the Bank of Canada will be cautious in its approach and try to avoid pushing the country into recession.
Buyers itching to get back in the house hunt may not have to wait for that clarity from the central bank to get a good deal on a home, notes Alexander.
There is “much less frenzy now than last spring”, he says, with the ability to position conditions and take time to decide before leaping into the market.
“As a buyer you now have a choice,” says Alexander. “So if the time is right for you and you can afford something that is within your means and you are not overstretching yourself, then go for it. It is a great time now.
© 2022 Global News, a division of Corus Entertainment Inc.