Canada's housing market is anticipated to experience a slowdown this fall, as potential buyers and sellers are waiting for the Bank of Canada's decision on the future path of interest rates, according to a new poll released on Tuesday. The survey conducted by Re/Max Canada predicts that home prices will remain flat nationally from August until the end of 2023.
The market's softer outlook is attributed to a combination of the highest interest rates in over two decades and a lack of available inventory in most housing markets. The central bank's next decision on policy rates, set for Wednesday, continues to influence many decisions among buyers and sellers, as indicated by Re/Max polling.
The brokerage commissioned Leger to conduct a survey in July, following the Bank of Canada's quarter-point rate hike that month. The poll involved over 1,500 Canadians, with one in three respondents who were interested in buying or selling a home in the next 12 months indicating they'd wait to see how interest rate changes play out before acting.
Despite an overall decline in national housing prices since the pandemic-era market's peak in February 2022, affordability challenges continue to deter many young Canadians from home ownership. According to Re/Max, a lack of affordable housing inventory has led more than half of Gen Z respondents (55%) and 49% of millennials to adjust their housing plans.
Inventory shortages have been a critical issue this year, with 74.1% of markets reporting year-over-year declines in housing stock from January to July. However, while Re/Max expects little movement nationally in home prices, some regions are forecast to see growth heading into 2024.
Prices are expected to rise from August through the end of the year in the Greater Toronto Area (up 2.5%), Moncton, N.B. (up three per cent), Calgary (up 4.5%), and Sudbury, Ont. (up five per cent). Conversely, house prices are projected to decline in Halifax (down one per cent), the Greater Vancouver Area (down two per cent), Kelowna, B.C. (down three per cent), and Ontario's Durham Region (down five per cent) before the end of 2023.
Overall, one in ten Canadians are planning to buy a home in the next 12 months as per Re/Max's report. The Leger polling has a margin of error of +/- 2.5%, Re/Max stated.
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