The Canadian Real Estate Association (CREA) has lowered its housing market forecast for the remainder of the year.
Despite consecutive interest rate cuts by the Bank of Canada in recent months, the market has remained in a holding pattern and the association expects it to remain so until next spring.
However, with the central bank having cut its overnight lending rate by another 50 basis points on Oct. 23, to 3.75 per cent from 4.25 per cent — for a total 1.25 per cent reduction since it first began easing interest rates in June — and many economists expecting there to be no slowdown in order to stimulate the economy, CREA is predicting a sharp market rebound beginning in the second quarter of 2025.
CREA’s previous forecast assumed a gradual return of buyers into the market starting with the first interest rate cuts this summer. It muses that the type of buyer who was, until recently, entering the market with a three-year fixed rate mortgage has decided to hold off for better rates that now seem just around the corner.
Some 468,900 residential properties are predicted to trade hands via Canadian MLS systems by the end of 2024, a 5.2 per cent increase from 2023.
National home sales are forecast to climb a further 6.6 per cent to 499,800 units in 2025, as interest rates continue to decline and demand flows back off the sidelines.
The national average home price is expected to edge up 0.9 per cent on an annual basis to $683,200 in 2024, and by 4.4 per cent to $713,375 in 2025.
The revised forecast came as CREA reported the latest national home sales and pricing data for September.
National home sales were up slightly by 1.9 per cent in the kick-off month to the fall market compared to August, reaching their highest level since July 2023.
The national increase was led by the Greater Toronto Area and Hamilton-Burlington, Montreal and Quebec City, as well as Greater Vancouver and Victoria.
On a year-over-year basis, the number of homes that changed hands rose 6.9 per cent.
New listings posted a 4.9 per cent month-over-month increase in September, as sellers listed properties in larger than normal numbers for the first weeks of the month. Gains were broad-based, with most of the country’s biggest markets topping the list.
There were 185,427 properties listed for sale on all Canadian MLS systems at the end of September, up 16.8 per cent from a year earlier.
With sales rising by less than new listings in September, there was little change in prices from August, up just 0.1 per cent.
The average price of a home in September amounted to $669,630, up 2.1 per cent from the same month last year.
Prices at the national level have remained mostly flat since the beginning of 2024.