2023 Housing market outlook of Canada for buyers and sellers
After the COVID-19 pandemic caused a frenzied housing market in Canada for several years, the Bank of Canada's interest rate hikes in 2022 cooled the residential real estate sector in cities across the country.
Experts and economists who spoke with Global News were nearly unanimous in their prediction that the market would continue to cool through 2023. They cited high mortgage rates, a lack of available homes, and the unknown location of the Bank of Canada's interest rate cycle's peak as reasons for their prediction.
Where, if anywhere, will Canada's housing market's price declines bottom out? Will there be an even distribution of impact across markets and types of real property? Experts in the field have predicted the following housing trends and markets for 2023.
What area do you predict prices will bottom out in?
According to the most recent numbers from the Canadian Real Estate Association (CREA), the average sale price of a home in Canada dropped 19 percent from its peak in February to November, when it hit $636,838 (after adjusting for seasonal factors).
What makes you think we haven't hit rock bottom yet? With home sales and prices decreasing at a slower rate, RBC's assistant chief economist Robert Hogue wrote in a note on December 19 that there are "early signs the correction is approaching its final stage." He predicted prices could drop in "the early part of 2023," but he caveated that this would likely vary from market to market.
Hogue speculated that the bottoming out of the market would occur around the time the Bank of Canada stabilized its benchmark interest rate (the central bank signaled in December that it might be near the end of its hiking cycle), suggesting that this time of year might be the most affordable for first-time buyers.
Canadian brokerages do not anticipate any significant changes in the market between 2022 and 2023, although the spring may mark a low point in prices. Re/Max While Canada's housing outlook for 2023 predicts a yearly decline of 3.3% in the average home price, Royal LePage's annual survey predicts a more modest decline of 1%.
As reported by Global News in late November, Re/Max Canada president Chris Alexander said that the interest rate policy of the Bank of Canada is the "big wild card" that will decide when buyers and sellers feel confident returning to the market.
Price increases in some housing markets are possible
Specifically, the Greater Toronto Area (11.8 percent lower), Barrie (15 percent lower), and Durham (19 percent lower) are predicted by Re/Max to be the most at price in Ontario in the coming year (2023). (10 per cent lower).