Young homebuyers intent on purchasing their first residence are having second thoughts as affordable housing gets tricky to find and the key interest rate sits at 5 per cent.
According to a Leger survey, commissioned by RE/MAX Canada as part of its 2023 Fall Housing Market Outlook Report, more than half of Gen Zs (55 per cent), and nearly half of Millennials (49 per cent) are rethinking their housing plans.
While the Bank of Canada decided against another rate hike on September 6, that’s not to say further hikes won’t follow. Data from the report shows that younger Canadians are more likely to rely on BoC interest rate announcements to assess the best time to buy or sell.
Overall, 33 per cent of Canadians who wish to buy and/or sell in the next 12 months will wait and see how interest rate changes play out before buying. For more than half, further interest rate hikes this year will not change their financial situation or impact their plans to buy or sell.
Contributors to the report expect the average home sale price in Canada to remain unchanged between now and the end of 2023. “If the fall market is an early indicator for 2024 activity, we may see a very active first quarter as buyers and sellers take advantage of easing prices into the earlier part of next year,” Christopher Alexander, president, RE/MAX Canada, said in a statement.
“While we wait for governments to implement a tangible national housing strategy to boost Canada’s supply of both affordable and diverse housing, the market is starting to ease in some regions. This is bringing some much-needed relief from the sky-high prices we’ve experienced over the past couple of years.”
Projected home prices by region
Forty-four per cent of housing markets in Canada are expected to be sellers’ markets in 2023, according to the firm’s realtors who shared an analysis of their local markets between January and July 2022 and 2023. The rest expect a mix of markets depending on the specific location.
Ontario
There are varying decreases coming for fall sale prices. Regions where this is expected include Hamilton, Ottawa and Windsor ( two per cent), North Bay three per cent), Kitchener-Waterloo (four per cent), Durham Region and Peterborough (five per cent), and Thunder Bay and Peel Region (zero per cent).
The sales price is projected to rise in Burlington (one per cent), Lakelands West and Oakville (two per cent), York Region (2.2 per cent), Greater Toronto Area (2.5 per cent), and Sudbury (five per cent).
Western Canada and the Prairies
Western Canada and the Prairies are forecasting an increase this fall by 0.7 per cent to 4.5 per cent in regions such as Calgary, Edmonton, Winnipeg and Red Deer. Regions such as Greater Vancouver Area and Kelowna are expecting sales to soften by two to three per cent.
Atlantic Canada
All markets in Atlantic Canada reported low inventory and most are considered sellers’ markets, apart from the Charlottetown area, PEI, where balance is more evident.
Average residential prices are expected to decline between one and two per cent in Halifax and Charlottetown Area for the remainder of 2023 and increase by three per cent in Moncton. In St. John’s, NF, prices are expected to remain flat for the back-half of 2023.
