2024 Housing Market Outlook: A Forecast on Canada's Residential Sector
National Overview
Expect reduced economic growth in 2024, with a resurgence predicted for 2025-2026 as interest rates decrease. Housing starts will decline in 2024 due to high interest rates but should partially rebound in the following years.
Market Trends
MLS® Prices: Predicted to exceed previous peak levels, indicating persistent affordability issues.
MLS® Sales: Expected to increase, driven by strong population growth, yet affordability remains a concern.
Rental Market: Elevated demand will surpass supply, leading to rising rents and lower vacancy rates.
Economic Insights
Interest rate hikes have slowed economic growth, impacting the housing market. Builders face financing challenges, especially for smaller structures and apartments. As rates decrease, demand and growth in sales and prices are expected to rise.
Regional Highlights
Prairie Provinces: Anticipated to perform well due to affordable home prices and a strong economic outlook.
Ontario and British Columbia: Expected to see declines in housing starts due to high prices and financing challenges.
Quebec: Predicted to see robust growth, realigning with fundamental levels.
Atlantic Region: New home construction pressures will ease, with starts aligning with weaker population growth
Sales and Prices
Home prices are expected to rise, potentially surpassing early 2022 levels by 2026. MLS® sales will rebound, fueled by declining mortgage rates and population growth, but will not reach 2020-2021 levels due to affordability constraints.
Rental Demand
Despite increased homeownership demand, many households will continue to rent due to affordability issues. Strong population growth will further boost rental demand, keeping rental markets tight.
Conclusion
The 2024 housing market outlook highlights significant regional disparities and ongoing affordability challenges. As economic conditions evolve, housing demand dynamics will shift, impacting both ownership and rental markets across Canada
Kristin Delgado
