The Canadian Real Estate Association (CREA) has adjusted its outlook for the Canadian housing market, anticipating a period of slower growth in the near term. The revised forecast reflects the changing expectations surrounding interest rate cuts, which have become more aggressive than initially predicted.
Initially, CREA projected a gradual return of buyers as interest rates began to fall this summer. However, the market has seen little movement, suggesting that potential buyers with three-year fixed-rate mortgages have chosen to wait for even lower rates, which now appear to be on the horizon.
As a result of this shift, the market is expected to remain relatively stable until next spring, when a more substantial rebound is anticipated.
Here’s a breakdown of CREA’s revised forecast:
*
2024:
468,900 residential properties are expected to be sold via Canadian MLS® Systems, representing a 5.2% increase from 2023. The national average home price is projected to rise by 0.9% year-over-year to $683,200.*
2025:
National home sales are forecast to climb further by 6.6% to 499,800 units, driven by continued interest rate declines and pent-up demand. The national average home price is projected to increase by 4.4% to $713,375.CREA attributes the expected rebound in 2025 to a combination of factors, including:
*
Declining interest rates:
As interest rates continue to fall, more buyers will be able to enter the market.*
Pent-up demand:
The holding pattern in the market has created a pool of buyers waiting for the right time to enter, which is expected to translate into increased demand once interest rates stabilize.CREA regularly updates its forecasts, and the next one is scheduled to be released on Wednesday, January 15, 2025.
About the Canadian Real Estate Association
The Canadian Real Estate Association (CREA) is a prominent industry association representing over 160,000 REALTORS® across Canada. CREA works to support the economic and social well-being of communities by advocating for property owners, buyers, and sellers.