Real Estate Rollercoaster: The Canadian Market in 2024
Real Estate Rollercoaster: The Canadian Market in 2024
Alex McFadyen
July 27, 2024
The first half of 2024 has been a whirlwind for the Canadian real estate market. With interest rate changes, fluctuating listings, and economic uncertainties, it's been a challenge to keep up. Let's break down the highlights and what to expect moving forward.
Market Overview
The year kicked off with high expectations. Optimism was in the air, with many anticipating a recovery in the real estate market and significant rate drops. However, the reality unfolded differently.
Interest Rate Rollercoaster
January-March 2024: The Bank of Canada initially held off on major rate drops despite predictions. This led to a delay in market recovery.
April 2024: Expectations for a rate drop were dashed, causing a rush in listings but hesitant buyers.
June 2024: Finally, a quarter-point drop arrived, but it didn't immediately impact buyers' ability to qualify for more favorable mortgage rates.
"The interest rate changes have dictated the success or failure of real estate values across Canada."
Listings and Buyer Behavior
Early 2024: High Demand, Limited Supply
Fixed Rate Drops: January saw a significant drop in bond yields, leading to lower fixed mortgage rates.
Busy Months: February and March saw increased inquiries and multiple offer situations, especially in Alberta and BC.
Mid-2024: Surge in Listings, Buyer Hesitance
April-June 2024: A substantial increase in listings as fixed rates rose again. Many buyers remained on the sidelines, waiting for further rate cuts.
June 2024: Despite some rate drops, the market saw more listings than active buyers, leading to a balanced but cautious market.
Regional Variations
Alberta and BC
Alberta: Record-breaking benchmark prices for five consecutive months.
BC: Stable prices but a significant increase in active listings.
Ontario and Other Regions
Ontario: Varied performance, with some segments seeing multiple offers, but overall cautious activity.
Other Provinces: New Brunswick saw a notable price increase, while other areas like Saskatchewan experienced slower growth.
Key Trends and Changes
Construction and Housing Types
Construction Slowdown: A decline in new housing starts, particularly single-family homes.
Shift to Condos: Increased focus on one- and two-bedroom condos rather than family homes.
30-Year Amortization: Available for first-time buyers of new homes, effective August 2024.
Zoning Bylaws: New rules allowing more units per lot, potentially up to 10-12 stories near transit areas.
"The amount of single-family homes being started is substantially lower than we've seen historically."
Immigration and Market Pressure
Immigration: Continued high levels, although future growth is expected to slow.
Market Impact: High immigration rates put pressure on housing supply and prices.
Looking Ahead
Predictions for 2024 and Beyond
Short-Term: The second half of 2024 is expected to see some recovery, with further improvements in early 2025.
Long-Term: The market is predicted to grow significantly in 2025 and 2026, driven by interest rate changes and immigration.
"2024 has been crazy. I can't even imagine how much more you could pack into the market in that short of time."
The Canadian real estate market in 2024 has been marked by volatility and uncertainty. With interest rate fluctuations, a surge in listings, and varied regional performances, it's essential to stay informed and adaptable. The second half of the year promises more developments, making it crucial for buyers, sellers, and investors to keep a close eye on the market dynamics.
.jpg)
