As we head into the final stretch of the year, the Canadian Real Estate Association (CREA) is adjusting its forecast for the housing market yet again. Despite the Bank of Canada’s interest rate cuts, the anticipated gradual improvement has not materialized as expected. Let’s delve into the revised predictions and the current state of the real estate market in Canada.
- The national housing market is projected to remain stagnant until next spring, with an estimated 468,900 properties expected to change hands this year. This reflects a modest 5.2% increase from 2023, a downgrade from the previous forecasts in July (6.1%) and April (10.5%).
- In September, the average price of a home sold in Canada was $669,630, demonstrating a 2.1% increase from the same period last year. CREA now predicts a mere 0.9% annual price growth for 2024, down from the initial projection of 2.5%.
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Despite a 6.9% year-over-year rise in home sales in September, the month-over-month increase was only 1.9% following the Bank of Canada’s rate cuts. By the end of September, there were 185,427 properties listed for sale nationwide, up 16.8% from the previous year but still lower than historical averages for this time of year.
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New listings saw a 4.9% increase in September, driven by gains in major markets across the country. CREA is optimistic about a “sharper rebound” expected in the coming months, particularly by spring.
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CREA’s senior economist, Shaun Cathcart, highlighted the impact of interest rate cuts on sales trends, noting that some buyers may delay purchases due to the anticipation of further rate cuts. This could lead to a stronger rebound in 2025 at the expense of the last months of 2024.
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Looking ahead, CREA anticipates a 6.6% increase in national home sales in 2025, fueled by declining interest rates and renewed demand. Average home prices are forecasted to rise by 4.4% to $713,375 next year.
In conclusion, the Canadian real estate market is navigating through a period of uncertainty and adjustment, influenced by interest rate cuts and evolving economic conditions. Despite the current holding pattern, there is optimism for a rebound in the housing market by the upcoming year. Stay tuned for further developments as we monitor the dynamic landscape of Canadian real estate.
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