A higher interest rate environment and lack of inventory will continue to weigh on the housing market in the fall, according to a new Re/Max housing market outlook report, with average home prices in Canada expected to remain flat for the rest of 2023.
The report said interest rates and inventory levels will likely result in a softer market for the remainder of the year, something some Canadians may look to take advantage of going into 2024, says Re/Max Canada president Christopher Alexander.
“If the fall market is an early indicator for 2024 activity, we may see a very active first quarter as buyers and sellers take advantage of easing prices into the earlier part of next year,” he said in a statement.
“While we wait for governments to implement a tangible national housing strategy to boost Canada’s supply of both affordable and diverse housing, the market is starting to ease in some regions. This is bringing some much-needed relief from the sky-high prices we’ve experienced over the past couple of years.”
Still, while the national average home price is expected to be flat, some regions across the country will not see reprieve from higher prices. The report estimates that 44 per cent of housing markets in Canada are expected to be sellers’ markets through the remainder of the year, while the rest are a mix of balanced and buyers' markets.
Many prospective buyers and sellers appear to be waiting on the sidelines to see how the interest rate environment plays out. According to a Leger survey commissioned by Re/Max as part of the report, 33 per cent of Canadians interested in buying or selling a home in the next 12 months said they would wait to see how interest rate changes play out before buying.
Where home prices will rise and fall across Canada
In Western Canada, the majority of markets are expected to see average residential sale prices to increase in the fall by between 0.7 per cent and 4.5 per cent. The regions that are expected to see price increases include Calgary, Edmonton, Red Deer and Winnipeg. At the same time, the Greater Vancouver Area and Kelowna in B.C. are expected to see sales soften by between two and three per cent.
In Ontario, 53 per cent of the market will likely be sellers' markets through the fall, while 40 per cent will be balanced and just seven per cent are expected to be buyers' markets. Areas that are expected to see prices rise include Burlington (up 1 per cent), Lakelands and Oakville (up 2 per cent), York Region (up 2.2 per cent), the Greater Toronto Area (up 2.5 per cent) and Sudbury (up 5 per cent.) Seven regions are expected to see home prices decrease through the rest of the year, including Hamilton, Ottawa and Windsor (down 2 per cent), North Bay (down 3 per cent), Kitchener-Waterloo (down 4 per cent), Durham Region and Peterborough (down 5 per cent).
In Atlantic Canada, Halifax and the Charlottetown Area will see prices fall between one and two per cent, while prices are expected to increase three per cent in Moncton. Most markets in the region are considered sellers’ markets, Re/Max said, with the exception of Charlottetown which is considered balanced.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.